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How To Get The Lowest Mortgage Refinance Home Loan Rate
By EchoBay Loans Staff Writer

If you're thinking about refinancing, you're probably doing it with the intention of saving a substantial amount of money; so it only makes sense that you would want to refinance at the lowest interest rate possible. The trick, however, is figuring out what it takes to get the lowest available rate. To guarantee that you're getting the best refinance home loan rate possible, you're going to want to follow some simple steps.

The one thing that probably has the biggest impact on the amount of interest you'll pay on your refinance home loan is your credit rating. This all-important piece of personal information is what lenders use to size you up. The better your credit rating, the lower your interest rate will be. Because of this, it's important to make sure that everything contained in your credit report is accurate.

The credit reporting process isn't foolproof, and it's very possible that your credit report reflects outdated information, or even worse, information that doesn't even pertain to you. There's nothing worse than paying for someone else's mistakes, and if you don't realize that someone else's negative credit history is being used to determine your interest rate, that's exactly what could happen.

The best way to ensure the accuracy of your credit information is to contact the three credit reporting agencies and ask them to send you a copy of your report. Not only will this allow you to make sure that the information displayed on your report is accurate, but it will give you an overall picture of the health of your credit. If there are past due doctor's bills that you forgot about, you'll be reminded and you can pay those off and get the information removed from your credit report before applying for your refinance home loan.

Another step towards improving your credit report and lowering your interest rate is to pay down some of your outstanding debt. When reviewing your credit report, see what credit cards are carrying balances of more than 25 percent of the credit limit and try to pay them down to at least that level.

Of course, when looking for any bargain, you're going to want to shop around. The same holds true when you're trying to find the lowest possible refinance home loan rate. Contact your local credit unions, banks and mortgage brokers, and make sure that you don't overlook one of the best resources you have at your disposal - the Internet. You can generally find the best rates online and since as little as one-half of a percent can equal thousands of dollars, online lending can be a huge money saver.

When you're comparing rates, make sure that you're comparing apples to apples, and not apples to oranges. Be sure that you look at the total APR and that you're being quoted interest rates that are based on a fixed-rate refinance home loan. The last thing you want to do is find yourself lured into refinancing with a "teaser" rate and then wind up paying a higher interest rate than what you were paying prior to your refinance.

In addition to taking steps to ensure you get the lowest interest rate, you should also make sure you get the best terms. Ask about things like points, origination fees and processing fees. Even if you're rolling the costs of your refinance into your new loan, you need to pay attention to how much it's going to cost you. Just because you don't feel the expense up front, doesn't mean that you aren't paying for it. In fact, when the costs are rolled into the refinance, you're paying interest in addition to these costs.

Even if following these guidelines saves you just of a percent, it could equal a lot of money over the life of your loan. In fact, a $150,000 loan at 6.00 percent versus 6.25 percent can save you more than $8,000 over the life of the loan. Makes working towards the lowest possible interest rate worth it, doesn't it?

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