The best refinance rates in Colorado aren’t as hard to find as most people think. Securing a mortgage with the best rates comes down to perfecting your qualifying factors and shopping around for the right rate.
Use these steps to get the best rate to refinance your mortgage.
Evaluate your Qualifying Factors
Before you apply for a mortgage, assess your financial situation. Ask yourself the following:
- What does my credit look like? If you aren’t sure, pull your free credit reports here. Everyone gets free weekly access. If you see late payments, credit lines extended over 30% of the credit line, or collections, fix what you can before applying for a loan.
- What is my debt-to-income ratio? Your DTI is the comparison of your monthly debts to your gross monthly income (income before taxes). Your mortgage, credit card payments, student loans, car loans, and personal loan payments should take up less than 43% of your income.
- Is my employment stable? Lenders like it when you have at least 2 years at your current job. If you changed jobs recently but stayed within the same industry, that can count too. What they don’t want is someone who hops around from job to job and doesn’t have any consistency.
- How much equity do I have in my home? Your equity is the difference between your home’s appraised value and the outstanding mortgage. The more equity you have, the less risk of default you pose to a lender, which may give you access to the best refinance rates in Colorado.
Shop Around for the Best Rates
No two lenders offer the same rates or have the same qualifying requirements. While all lenders must follow the basic requirements set forth by each loan program, such as conventional, FHA, VA, or USDA loans, they can also have their own criteria.
What one lender considers risky, another may not be as affected by and won’t adjust your interest rate for it. You won’t know who offers what rates until you apply.
When you shop around for the best refinance rates in Colorado, you should receive a Loan Estimate from each lender. Use this document to compare loans side-by-side to determine which one has the best offer.
Look at Other Factors
Don’t get so caught up in interest rates that you put yourself in a ‘bad loan.’ Customer service from start to finish should also play a role. Find yourself a loan officer that will walk you through the loan process and help you find the best loan and a lender that offers top-notch customer service throughout the loan term.
Shopping around for the best refinance rates in Colorado is important when you’re ready to refinance. Your current lender isn’t the only one who can offer you a great rate and term on your new loan. Shop around and find out what else is available to you. If you need help securing the best refinance rates in Colorado, contact me today and let me help!