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The best way to save is to take advantage of refinancing your loan. Refinance mortgage rates are generally lower than primary loan rates. Refinancing means you are getting a fresh loan by repaying the old one.

The loan amount is the same but the interest rate is lower.


Requirements for a Low Refinance Rate

Taking advantage of low rates of refinancing is not easy as the credit standards have stiffened and you might not qualify for the loan. Some of the requirements are:

  • Equity - the lenders are willing to offer low rates to those who have 5% equity in their homes and whose credit score is more than 680. Those who have 5% equity but credit score is less will have to pay more.
  • Conforming loans - the loans that can be brought by Fannie Mae and Freddie Mac and are resold to investors are called conforming loans. Loans of $417,000 or less are considered conforming loans, higher ones are known as jumbo loans.
  • A good credit score - credit score is something that can get you the best refinance rates. For the lowest refinance rate you need to get a FICO score of at least 680.


Comparing Refinance Rates

Comparing refinance rates is indispensable when you have equity in your home.

A good idea about the market rates and the various lenders will help you to get your mortgage approved at the lowest rates, negotiate terms and conditions that aids in consolidation of debt.

The procedure for finding the rate of refinancing is very simple. You just need to fill out online forms to refinance mortgage loans. It can help you compare rates provided by various lenders so you can decide which lender is offering the best rates.

Another method of comparing rates is the refinance calculator. Also, various websites provide daily updates and rate comparisons.


Getting the Best Refinance Rates

Getting refinance rates can be difficult as they vary a lot. The type of rate you will get will depend on your credit rating. The following are tips for getting the best rates:

  • Keep your credit rating as good as possible. Customers with excellent credit ratings get the lowest rates, while those with poor credit ratings get higher rates.
  • In order to choose the right company, shop around for rates. This will get you the optimum deal and avoid confusion.
  • You can have access to a large number of calculators, online forms, comparative analysis which can give you an insight as to which company is providing the lowest rates. You should surf some sites that give a good glimpse of the market rates.
  • Keep an eye on the fluctuations in the market. Refinance only when rates are at their lowest.