How To Get the Lowest Interest Rate When You Refinance

Image via WikipediaThis week the average interest rate on a 30 year mortgage dipped below 4 percent. This is only the second time in history that has happened.

Mortgage lender Freddie Mac said the rate on the 30-year fixed loan fell to 3.99 percent. Six weeks ago, it dropped to a low of 3.93 percent, according to the National Bureau of Economic Research. The 15 year fixed rate mortgage fell to 3.30 percent. Low mortgage interest rates should of had some effect on increasing home sales but homes sales are still at a 12 year low.

What can be done to help you get the best fixed rate mortgage?

Even though mortgage rates are at such a low interest rate it doesn't mean you will get these rates. It depends on your credit score among other things. You can get the best fixed rate mortgages if you prepare.

1.Have a great Credit History.
Being maxed out on your credit cards is a sure way to lower your credit score. Paying down your debts will help in raising your score. Before applying for the new mortgage its best to check your credit report. Sometimes mistakes can get into them. You have the ability to straighten the errors out. You can dispute the errors and if the credit reporting agency can't prove the item, then by law they have 30 days to remove it. After you fix your report be sure to wait a couple months so your score can return to a higher level.

2.Be sure to have cash in the bank.
Whenever you apply for a mortgage the lender always asks what are your balances in your checking , savings, and investing accounts. Having money in these accounts shows the lender that you aren't penniless because it shows you have the ability to save and hold on to your money. It tells the lender that you are less of a risk and will get you a lower interest rate.

3.Be a good consumer.
Being a good consumer means shopping around for who will get you the best mortgage deal. Start on the Internet to locate the best mortgage companies. Here you can compare many loans in a short period of time. Don't be afraid to call them on the phone and try to get a better deal. A lower interest rate or more favorable closing costs will save a lot of money..

Don't rush into getting a mortgage. Shopping around will save you a lot of money over time. A lower interest rate or less points will save you money over the life of the loan, keeping money in your pocket.