| There are many good reasons for refinancing a home | | | | - If you have more than 3-5 credit |
| mortgage loan, especially in troubled economic times. | | | | cards without outstanding balances, consider closing |
| Over the past several years, many people took | | | | one or more to decrease the number of creditors. Be |
| advantage of easy-to-get adjustable rate mortgages | | | | care of how you do this, though – for instance, |
| – often called ARMs, counting on the promise that | | | | closing out a credit card account with a high credit limit |
| real estate always increases in value. Unfortunately, | | | | and a low balance could actually hurt your credit rating. |
| the recent economic downturn proved that belief | | | | - Don’t close your oldest credit |
| wrong. Many homeowners who signed on for hybrid | | | | accounts. One of the factors that affects your credit |
| home mortgage loans expecting to be able to | | | | score is how long you’ve been handling credit |
| refinance into more favorable terms in a few years | | | | responsibly. Your older accounts will affect your score |
| are finding that it’s not as easy to refinance their | | | | positively. |
| mortgages as they’d hoped. There are, however, | | | | 1. Shop around for mortgage refinance loans. |
| some things you can do to make it easier to find a | | | | Ignore the come-hither emails and telephone calls |
| home mortgage loan refinance. | | | | offering you “great rates” to refinance your |
| 1. Get your credit report and clean it up if necessary. | | | | current home mortgage. Instead, do your own |
| Your credit score will be one of the biggest factors in | | | | research to find the best local and online lenders. You |
| determining whether you can get your mortgage | | | | can often request multiple quotes from several |
| refinanced, as well as the interest rate that you’ll be | | | | different lenders at online mortgage web sites. Try to |
| offered for your new home mortgage. If you | | | | get at least three mortgage quotes from three |
| haven’t checked it within the past few months, | | | | different lenders. That will give you a basis for |
| take the time to request a copy of your credit report | | | | comparison. |
| from the three credit reporting agencies. Remember | | | | 1. Sit down with a loan officer from a reputable |
| that you’re entitled to one free credit report per | | | | company to discuss your loan options. |
| year from each of the three main credit reporting | | | | While it’s not as easy to refinance a mortgage as |
| agencies. If it’s been a year or more since you | | | | it was a couple of years ago, there are still many |
| ordered a free credit report, you can get your report | | | | mortgage and refinancing options available through |
| for free. | | | | various lenders. Reputable lenders are interested in |
| Check your credit reports over carefully for any errors | | | | making sure that you’re offered a loan that fits |
| they may contain. If you find that they still list an | | | | your circumstances and your needs, so be honest in |
| account that you’ve paid off, for instance, contact | | | | what you hope to accomplish by refinancing. |
| the credit reporting agency to have them make a | | | | 1. Be sure that you’re comparing like loans when |
| correction. Some of the other errors you may | | | | you compare. |
| encounter include: | | | | Comparing loans against each other is an important |
| - listing closed accounts as open | | | | part of choosing the best mortgage refinance. In order |
| - listing disputed amounts on credit | | | | to decide which is the best deal, it’s important to |
| card statements as late or unpaid | | | | know that you are comparing similar loans. Make sure |
| - not including credit accounts that are | | | | that when you compare loans against each other, you |
| in good standing | | | | are comparing loans with the same number of |
| - inaccurate reporting of payment | | | | payments and amounts borrowed. |
| arrangements made with creditors | | | | When you find a mortgage refinance loan that seems |
| If your credit report contains any of these errors, | | | | appropriate, be sure that you read through all the |
| contact the reporting agency immediately to have it | | | | terms and conditions carefully to avoid any surprises in |
| corrected so that your credit reports reflect your | | | | the future. If you have trouble understanding the |
| situation as accurately and positively as possible. | | | | language in your loan contract, ask someone more |
| 1. Improve your credit score. | | | | knowledgeable to read it and explain each clause to |
| In addition to correcting your credit reports, there are | | | | you so that you understand exactly what you are |
| also some steps you can take to improve your credit | | | | agreeing to pay, when it must be paid, and what |
| score. A credit counselor can offer you detailed steps | | | | penalties you may face for late payments, missed |
| to take that apply to your specific situation, but in | | | | payments or early payments. |
| general, the following can help improve your credit | | | | Remember, a refinanced mortgage is as binding as |
| score: | | | | your original mortgage. If you don’t make the |
| - Pay down any credit card accounts | | | | payments to which you agree, you risk losing your |
| that are at or near the credit limit. This will improve | | | | home. Take the time to shop for your best deal on an |
| your ratio of available credit to debt, which will raise | | | | affordable home mortgage refinance, and be sure that |
| your credit score. | | | | you understand exactly what you are agreeing to pay. |