Mortgage rates tend to change from time to time, and when that happens, it can be lucrative to refinance your existing mortgage to get better rates against the older loan terms. But the question remains, how can one get the best refinance rates in Houston? That’s what we are going to discuss in this article.
What is Refinancing?
Refinancing a mortgage can be defined as the process of paying off an existing loan by getting a new loan. It is usually taken to benefit from a lower interest rate or to reduce the loan term of the old mortgage. Some apply for a refinance to convert adjustable-rate mortgage to fixed-rate mortgage. Another reason to refinance is to raise funds from the home equity to mitigate a financial emergency.
How do you get the best refinance rates?
If you are thinking of refinancing your mortgage, then, it only makes sense if you get a good deal out of the same, which means you need to aim for the best refinance rates. Here are a few tips to get the best deal:
- You can start by boosting your credit score. Oftentimes, people end up with a high-interest rate because of poor credit history. But, if you start working on improving it then you can acquire a refinance with better rates.
- Keeping your credit card balance less than 25% of the existing credit limit. You can ask your credit card provider to increase your credit limit to improve your score.
- A lot of people refrain from consumer credit, but that’s where they go wrong. Paying off your consumer credit regularly helps you to maintain a good credit history which helps in getting the best refinance rates.
- Try to lower your debt-to-income ratio that is another significant factor that the lender considers when refinancing. A DTI of 36% and less can help you get better rates.
- Don’t stick to one lender when looking to refinance your mortgage. Go to multiple lenders and then tally what each has to offer, and then select the best.
- You can get better rates by applying for a shorter mortgage term ranging from 15 to 30 years. It might lead to higher payments, so be sure before applying.
These are a few things that you can opt for to get the best refinance rates in Houston. But most importantly, you need a reliable lender by your side to get you favorable rates and mortgage terms.
