| June 13, 2012

Steps to securing a low refinance rate

Housing costs typically take up the largest percentage of a consumer’s monthly income. During periods of financial hardship, managing mortgage payments can be overwhelming for households, and many seek out ways to lower their monthly payment obligations. One of the most common methods individuals use to reduce their housing expenditure is refinancing their mortgage.

Refinancing allows homeowners to replace their existing mortgage with a new home loan, the latter of which offers better or more affordable terms. For example, consumers may extend the term of their loan, which results in lower monthly payments. This option, however, will result in owners paying more interest over the life of their loan. In addition, homeowners may choose to refinance their loan to a lower mortgage rate. Current rates have fallen to historic lows and the Federal Reserve Board has pledged to keep rates low through 2014, and possibly 2016.

There are several steps individuals will need to take in order to refinance their current mortgage.

First, individuals will need to have a strong credit score. Refinancing a loan is similar to applying for a brand new mortgage, and lenders will take an individual’s credit standing into account before extending financing. Lenders have different score requirements when it comes to extending loans, so it’s important to shop around for the right bank. To secure the best interest rates, consumers may need a credit score in the 740 range or above, according to HSH.com. For this reason, it’s important for households to ensure that they are caught up on all their bills.

It can also be helpful for individuals to pay off credit card debt to show lenders that they are in good financial standing. Debt can hinder an individual’s credit score and make it more difficult for them to put money in savings. Consumers who want to refinance their mortgages may need savings to cover closing costs, fees and other expenses that come with undergoing the process.

Lastly, there are several refinance options to choose from. Homeowners who are trying to improve their finances should consider working with a housing counselor to choose the agreement that complements their goals. Counselors can also help individuals navigate the paperwork requirements and application criteria. Similar to applying for a first home loan, it’s important to start planning for a refinance months in advance to have enough time to clean up credit and save money.

Category icon Uncategorized

Tag Icon

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

All Consolidated Credit counselors are certified personal financial counselors (CFC) We've helped 5 million people get out of debt! Call us today and see what we can do for you.

Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

The National Industry Standards for Homeownership Education and Counseling are a set of guidelines for quality homeownership and counseling services. Industry professionals who adopt these standards can be trusted to provide consistent, high quality advice.
Click here to learn more.

Consolidated Credit Consulting Services, Inc. has been verified as the owner or operator of the Web site located at www.consolidatedcredit.org. Official records confirm Consolidated Credit Consulting Services, Inc. as a valid business. Call us today and see what we can do for you.

Consolidated Credit is a Certified ISO 9001 company, as verified through Bureau Veritas Certification.

Time tested and customer trusted. Consolidated Credit Counseling Services has been a BBB Accredited Business since 1998 and has a current A+ rating. Call us today and see what we can do for you.

View the Consolidatedcredit.org review status

Time tested and customer trusted. Consolidated Credit Counseling Services has been a BBB Accredited Business since 1998 and has a current A+ rating. Call us today and see what we can do for you.

View the Consolidatedcredit.org review status

Consolidated Credit is proud to be an ANAB accredited member. Accreditation by a recognized and respected body such as ANAB ensures the impartiality and competence of our company. To see what we can do for you, give us a call.

U.S. Department of Housing and Urban Development - HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. Consolidated Credit is proud to be a member of HUD and also part of the Hope Now Alliance.

You can save!

With this amount of debt, you'd pay around $xx.xx on a DMP.

FREE Debt Consultation
VE Interactive