Wednesday

12-02-2025 Vol 19

3 Ways To Get The Best Deal On Your Home Loan Refinance

If you own your own home but are wanting to pay a lower mortgage payment each month, refinancing your home loan could be a great option for you. However, while this might sound like something that is all benefits, there are a few things that you’ll want to consider before you go through the process of refinancing. 

To help ensure that you make the best choice here, here are three ways to get the best deal on your home loan refinance. 

Get Your Credit Score Ready

In most instances, a homeowner will want to refinance their home loan in order to get a better interest rate on their loan. And since interest rates are based on both what the rates are for the market in general and how good your credit is, there are things that you can do to give yourself the best chance of getting a great interest rate.

The main thing you’ll want to focus on, according to Ellen Chang, a contributor to Bankrate.com, is improving your credit score. This can best be done by ensuring that you’re always paying your bills on-time, that you’re only using a small portion of the credit you have available to you, and that you haven’t opened up any new lines of credit in recent history. If these things don’t sound like how you’ve been using your credit, you may want to wait until your credit score gets a little higher before you refinance. 

Ask About All Fees

One thing that might get you excited about the prospect of refinancing your mortgage is hearing about promotions like a “no-cost” refinance. And while this sounds enticing, Hal M. Bundrick, a contributor to NerdWallet.com, recommends that you be very careful about these types of offers. 

Speaking in general terms, nothing in life is free, and this usually includes refinancing offers that claim to come at no cost to you. What usually happens is that the costs will be included as part of the loan. So while you’re not technically paying anything for the refinance out-of-pocket, you will be paying closing costs and other fees over the life of your loan. Knowing this, it’s best to ask about all fees before you decide to refinance. 

Figure Out Your Break-Even Point

Before you jump on the first refinance offer that looks great to you on the surface, Alia Hoyt, a contributor to How Stuff Works, advises that you take the time to figure out what the break-even point will be for you for each refinance offer you solicit. The break-even point is how long it will take for you to recover the costs of refinancing in the first place. If it won’t take long and you plan on being in your home for a while, then that’s great. But if it will take you quite a while to recoup those costs or you are planning to move in the near future, a refinance might not be worth it. 

If you’re thinking about refinancing your home loan, consider using the tips mentioned above to help you get the best deal possible for your unique circumstances.

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