Getting a Better Rate on a Fixed Mortgage

At one point, it seemed like mortgage rates were never going to decrease when they hovered around six percent. Then they lowered to five percent, and since then have gone even lower. Many homeowners got their mortgages locked in when they saw the rates at five and six percent, and now want to save even more money every month by getting into a lower rate. The best way to go about getting a better rate on a fixed mortgage is to refinance, but always get mortgage quotes as well as relevant information before taking the plunge. The goal is to get into a lower interest rate, not add on to the length of the mortgage with fees and other charges.

Before taking the step to get mortgage quotes for a refinance, ask some questions first. Are there plans to stay in the home for a long period of time? What are the plans for the extra money that is gained from refinancing? Will the refinance save a significant amount of money? These are all important as they play a role in the move to get a lower mortgage rate. Sometimes, the overall savings is not very substantial, and winds up costing the homeowner more in the long run.

Refinancing a mortgage pays off the old mortgage and starts a new one. This is an opportunity to take a second mortgage and combine it with the first, effectively rolling them into one payment. Doing so has the advantage of stabilizing monthly costs by only having one payment to make, and at a lower interest rate.

The Internet has made it so that a home refinance can be done online, without ever stepping foot into an office. Many finance corporations have applications that a user can fill out online and receive mortgage quotes for a refinance. Typically, a quote is an estimate of the overall savings and fees, but most companies honor their quotes provided the individual decides to utilize their services. Some sites offer refinance calculators that estimate the amount of money that is saved by moving to a lower rate.

For those who prefer face-to-face transactions, the bank is the most logical place to start. Start at the bank where current accounts are held; even the biggest of banks offer existing customers better deals than those who are not. If the bank does not offer any discounts for current customers, don’t hesitate to shop around. 

Ultimately, the best way to get a better rate on a current mortgage is to shop around. Let the financiers fight for the business, which benefits the customer in the form of the best interest rates and low fees.

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