What Factors Determine Your Refinance Mortgage Rates

Mortgage Refinance seems a pretty comprehensible option while opting out of the current mortgage plan. But then there needs a lot of homework to be done while zeroing in on a suitable mortgages refinance. You need to settle for the best refinance mortgage rates, which rather help you surge out of the debt loop quickly than further pull you down. Take a look at these discerning factors before opting in for a refinance mortgage rate.

1.    Type of Property - Refinancing a condominium is more expensive than a single-family home. In short refinancing a newly built space demands for higher interest rates. Although, this isn’t the only determining factor. Hence, it’s crucial that you talk it out with your lender to see what conditions suit you best.

2.    Loan Term - Fixed or variable, your current mortgage rate makes a whole lot of difference to the succeeding refinance mortgage rates. Where in variable the mortgage rates fluctuate, a longer period fixed loan rate could make you end up paying more. If you have a fixed rate, refinance usually extends for longer than 10 years.

3.    Debt-to-income Ratio - Yes, refinancing is a good way of repaying the current loan, but what about the refinance loan? Would you able to pay that back to the bank. The lenders determine the above on a debt-to-income ratio. Considering the result of the ratio, a higher value denies you the liberty of a refinancing mortgage.

4.    Credit Score - It goes without saying that someone with an excellent track record of credit score gets labeled in the low-risk category and eventually gets approved of the refinance too. But understand, to qualify for refinance mortgage your credit score needs to be at least or above 500 points albeit with a higher mortgage rate.

5.    Striking at the right time - Since the interest rates waver from time to time, keep a check on the updates. Make sure that you lock in on a good rate. These are time-bound decisions, and hence should be taken wisely.