Refinancing Your Iowa Home

Refinancing your Iowa home can be a smart financial mood depending on your situation. Whether you are looking to lower your monthly payment or shorten your mortgage term, there are a number of good reasons to refinance. However, knowing what to look for in your Iowa refinance products and lenders will get you on the road to saving money.

Map It Out

Having a plan for your Iowa refinancing provides you with a roadmap of sorts. You will be able to see more clearly why you are refinancing and what you want to get out of your efforts. This will allow you to be smarter about picking an Iowa refinance lender and specific loan product. Having a clear plan for your refinancing goals is the first step in smart refinancing.

Get Your Act Together

Since refinancing your Iowa home is getting a brand new mortgage, you will need to get your finances and paperwork together. You will want to take time to review your finances to see if you have enough to cover refinance closing costs. You will also want to review your credit situation, because your credit will have a great impact on your refinance rate. If you are considering refinancing, you will want to be sure you are putting forth efforts to improve your credit rating in the months leading up to your refinancing. Be sure you are paying your bills on time and keep your debt to income ratio low.

Find the Best Rate

Although refinancing your Iowa home can be a big money saver, you want to wait for the right time to go through the refinancing process. It is about optimizing your savings. Therefore, experts agree that you should not refinance until Iowa refinance rates are at least two points lower than what you are currently paying on your mortgage. This way you will be able to cover all of your fees for your refinancing. In some cases lenders will waive fees, so you may be able to refinance sooner, but in general two points is the recommendation..

Find a Good Lender

Besides rates, you should also be looking at fees and refinance lender qualifications. Do your research into different lenders, what they have to offer toward your refinancing. Sometimes lenders offer lower rates, but higher fees. Other Iowa refinance lenders will offer some low fees, but inflate others or require points. It is also important that you work with a reputable lender that has good financial ratings and customer service recommendations so you can avoid pitfalls like mortgage fraud.

Get it in Writing

One thing your lender should always give you is your rate in writing. This way your Iowa refinance rate is locked in and cannot be changed prior to your closing. Also, be sure your lender gives you a good faith estimate, which will allow you to budget for your refinance closing costs. A good faith estimate outlines your fees and costs associated with your refinancing. However, understand that it is just an estimate of costs, so your actual closing could cost you a little more or a little less, and you should budget accordingly.