When you’re refinancing a home to pay off debt, you want to get the best possible rate. After all, that rate will impact the amount of your monthly mortgage payment as well as the total amount of interest you will pay over time and if you’re doing a cash-out refinance, you want the best rates so you can get the largest amount of cash back to use on home projects or paying off debt.
Unfortunately, nobody has a crystal ball to predict with any certainty whether home refinance rates will rise or fall. But there are some things you can do to help you get a rate you’ll be happy with. It’s important to talk with local mortgage lenders so you can get an inside look at everything you need to know about refinancing a home to pay off debt.
At BrightPath, our mortgage lenders suggest the following tips on how to get the best refinancing rates:
Work on Improving Your Credit Profile
Mortgage refinance rates depend a large extent on the borrowers’ credit profile and scores. Before you apply to refinance your mortgage, do what you can to improve both. While you may get approved with a credit score of 620, you will end up paying a higher refinance rate than someone else who has a credit score of 760.
Get Organized When Refinancing a Home to Pay Off Debt
When you refinance, you may have the opportunity to lock in an interest rate for a specific period of time. In order to get the “locked-in” rate if interest rates are rising, you will need to provide all required paperwork for the lender. Mortgage lenders will tell you exactly what is required for your specific loan. However, in general, you can expect to be asked to provide tax returns, proof of income, bank statements, and statements for brokerage accounts or other investments. Having that information organized and ready can help you secure a favorable rate when refinancing a home to pay off debt.
Consider Loan Terms and Types
Your mortgage refinance rate will also be impacted by the term and the type of your mortgage loan. Generally speaking, someone choosing a 15-year refinance will pay less than someone with a 30-year loan. You may also have access to different loan options, including conventional refinance loans, cash-out refinance loans, FHA loans and other products. It’s important to ask mortgage lenders to provide you with the choices available to you.
It’s also important to understand the full cost of the loan, including the APR, closing costs, points, and any other related fees. These other expenses can make a lower interest rate less attractive for some borrowers.
When Refinancing a Home to Pay Off Debt Choose BrightPath For Your Mortgage Refinance
Refinancing a home to pay off debt does not have to be a stressful process. At BrightPath, we offer a variety of mortgage refinance products, including VA loans, Cash-Out Refinance, FHA loans, USDA Rural Development loans, loans with zero closing costs, and more.
Getting started with BrightPath is easy. Call us any time at 888-222-6003, contact us online, or chat live with an agent on our website. When you’re ready, you can even apply for your mortgage refinance online in just a matter of minutes.