Mortgage Refinance Tips That Save You Money

With today's economy in dire straights, the need for refinancing is increasing. The problem is that banks have been burned recently and their risk levels have dropped to almost zero because they are afraid to lend any money at all. Here are some mortgage refinance tips to make your refi go smoothly.

Before heading to a lender to check out your refinancing options, you first need to know exactly what your house is worth. If your house value has dropped to the point that you owe more than it's worth, you'll need to get the value of your home back to the point where you have enough equity to borrow against. This might entail putting in some fairly expensive upgrades.

If these upgrades will add the value you need, and you can afford it, you should do it as soon as possible. Upgrades might be as simple as some granite counter tops or you may need some extensive professional landscaping throughout your property.

Also take into consideration why are you trying to refinance. If you took out your mortgage at the height of the housing bubble about five years ago, chances are still got a good APR (assuming you had an excellent FICO score).

Now, five years later, those same rates - and lower - are the norm. You have an excellent chance of having your mortgage reset to a rate that is very comparable to what you are already paying, if not lower. Before spending money on a refinance - which will include closing costs, tax stamps, an appraisal, and a broker's fee to say the least, let the loan reset. You might be pleasantly surprised - you'll save a bundle.

As with any type of loan, your rate will depend on your credit history and your FICO score. If these have changed for the worse in the time since your last mortgage or refinance, you could have a problem. If your original mortgage was taken out at a time when your APR was significantly higher than today's average rates, and you are in a position where you need to do everything possible to reduce your monthly payments, it might backfire. Your bad credit might actually increase your new mortgage payments.

Select a lender you believe you can do business with. Remember that each time a lender makes an inquiry on your credit history, it actually is a strike against you even if you get the loan. Don't waste your time or ruin your credit by applying with multiple banks.

Gerald Tommey has been writing articles online for nearly eight years. You can visit his latest web site at http://www.cheapportableairconditioner.net where you can learn about using a Delonghi Air Conditioner to cool your home.