Refinancing Mortgage Rates

A refinancing mortgage rate quote is the most important question by borrowers when seeking out a potential lender to hopefully receive a better interest rate than their original home mortgage loan. Refinancing mortgage rates fluctuate daily with the regular interest; however, they are typically lower. Interest needs to be lower in order to get a borrower to refinance. If the borrower can save money with one lender versus another, most likely they will refinance. To refinance is defined as to finance again. This is done by taking out a new home loan, and paying off the old one.

The interest charged to finance again is usually lower than a standard home financing interest, but that isn't always the case. For example: when home loan interest hit all time lows, refinancing mortgage rates couldn't compare. Banks do offer the borrower the option to refinance at the same interest, but extend the loan period back to 30 years. This dramatically lowers the borrower's monthly payment determined by how long they have been paying on the original mortgage. For example: If a borrower has been paying a home loan of $100,000 for 10 years at a 6.5% interest, the payments are $632.07 per month.

If a borrower is seeking another form of financing for the same percentage, 6.5%, and decides to extend that new loan over 30 years (instead of the 20 that is remaining), the new monthly payment would be $535.84 per month. This is about a $100 difference per month. The downside to low loan interest is that it doesn't save the borrower any interest in the long run; however, options do exist for the lowering of a monthly payment. A refinancing mortgage rate quote is based on the credit score of the borrower. The higher the credit score, the lower the interest charge. "Every man's work shall be made manifest...the fire shall try every man's work of what sort it is" (1 Corinthians 3:13).

It is recommended that a borrower receive a copy of their credit report from each of the three credit report agencies: Equifax, Experian, and TransUnion, take the scores and reveal them to different lenders to get accurate refinancing mortgage rates. Whenever a lender pulls their own credit report on an individual, a point is deducted from the applicant's score. It is important to keep all points when searching for a good refinancing mortgage rate quote. A couple points in the wrong direction could cost a borrower thousands in lost interest payments. Experts recommend viewing potential lenders customer satisfaction rating using the Better Business Bureau as a reference.

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