According to the University of Illinois, “Refinancing a mortgage is simply taking out a new mortgage to pay off the existing loan on a home. ” Refinancing can allow a homeowner to lower her monthly prices by securing a low-rate home mortgage. Homeowners can search for a low-rate loan on the internet.
Visit the yearly Credit Report Request Service site to order your credit report online (see Resources). You can receive a free copy of your credit report every year from each of the national credit-reporting businesses. Verify your credit report reveals accurate details. It will include a section which lets you dispute incorrect data. Pay off any past-due invoices and collections which appear on your credit file. Ensuring your credit standing is in pristine condition will position you for refinancing into a low-rate loan.
Obtain a competitive interest rate when refinancing. Get banks to compete for your business. Contact your current lender and E-Loan about refinancing your home loan (see Resources). Have each lender send its best rate quote for refinancing your home. Conduct a true-cost comparison by viewing the yearly percentage rate (APR) for every lender.
Submit your application to the lender that offers the lowest interest rate. A loan officer will prepare a loan package to start your refinance transaction. Check all documents to confirm the interest rate shown reflects the agreed-upon terms.