6 tips for a successful home refinance

Wondering how to refinance a mortgage with a minimum of hassle? Here are 6 mortgage refinance tips to help you choose the right refinance and complete the process smoothly.

  1. Get disclosures from at least 3 refinance lenders

    Studies show that most people still don't shop for the best mortgage or compare mortgage quotes. Taking the time to do this could save between 0.375 percent and 0.625 percent on your refinance rate. On a $200,000 loan over 30 years, that's between $11,492 and $19,388!

  2. Choose the right loan

    You could spend hours negotiating 0.375 percent off the rate on a 30-year fixed mortgage. But if you plan to move in a few years, you could knock nearly a full percent off your rate by switching to a 7/1 or 5/1 mortgage, which is fixed for five or seven years. The savings during that time could be enough to buy your next car--with cash.

  3. Know your credit score

    More than ever, your credit score influences what you pay for a mortgage. A single point like the difference between 679 and 680 can add thousands to your loan fees. Get your credit report from www.annualcreditreport.com and purchase your scores. You can't get meaningful refinance mortgage information and quotes without a credit score.

  4. Increase your credit score

    Mortgage pricing changes at 20-point increments in your credit score: 640-659, 660-679, and so on. If you're at 679, pay down some balances to get past 680 before refinancing.

  5. Get your documents early

    You're responsible for what you sign. Do you really want to be wading through 30 pages of boilerplate during a half-hour appointment with your title officer? Read them at home and call your loan officer if you have questions.

  6. Never, ever sign anything you don't understand

    If your loan officer cannot provide an explanation you feel comfortable with, find one who can.