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Refinancing your mortgage is easier than ever, with a ton of options to choose from. However, all the options mean that you have to do some research, finding the option that is best for you and your financial means.
Getting quotes is recommended but, there is never indication as to how many quotes you should get. In short, there is no limit, as the more options, you have the lower you can go and the more you can negotiate for the rate that you want. Still, not many of us have time to chat with agents all the time, so what is a good number of quotes to find the best refinancing options.
The Sweet Spot
As a good rule of thumb, it’s good to find at least 4 quotes. This is right there in the middle and is not too few or too many. The more mortgage lenders that you compare, the more that you can save, choosing options that fit your budget better.
Instead of dragging your feet from lender to lender, you should aim for getting all of the quotes in the same day, comparing them to one another. That’s because some offers expire, and it’s good to see what each one has to offer as compared to the other.
A Few Tricks to Remember
Apart from being able to see the number on paper and compare them, getting quotes from multiple lenders can be used to your advantage in plenty of ways. Below, we’ll share some tricks of the trade of how you make the most of your quotes.
1. Read between the numbers
Sometimes, lenders like to put out a final number and make it a low one. They do this to drive in traffic only to hit you with huge closing costs that make them more expensive than the competition. Make sure to read all of the fine print and don’t fall for super low numbers from the get-go.
Negotiating can seem intimidating to some but, if you have solid ground to stand on, what do you have to lose? Using other quotes, you can take them to the lender that you’re hoping to bank with and show them what the competition has to offer. In most cases, they will knock off some points from your rate to earn your business or even match what the competition gave you.
3. Don’t sacrifice quality
Sometimes, the lowest rate doesn’t mean that it’s the best option. There are some lenders that don’t really offer much else as far as services that have a number that’s nice and low. Still, you want a quality lender that is going to be there when you need them, not someone that’s going to give you a cheap rate and move on.
What Mortgage Refinance Rate Should I Look For?
If you’re shopping for refinance rates now then you’re in luck. Currently, rates are much lower than they have been in a while, with the average falling around 4%. If you can get a 4% rate and below (and it’s less than what you pay now) that’s considered a solid rate. Still, any rate that’s lower than what you pay now will save you money in the long run. Remember that your refinance rate depends on a few key numbers like:
- Your credit score
- Your DTI ratio
- Your home equity
All of these will factor into your rate and, the more attractive you are as an applicant, the lower your rate will be. Keep that in mind when searching for rates and know where you stand.
When you’re looking for rates to refinance your home loan, shopping around is encouraged. Try and aim for at least four quotes from lenders that you have on your radar, especially those with a solid reputation. When shopping for rates, it’s all about shopping smart and using your quotes to your advantage.
Don’t be afraid to negotiate and don’t take the lowest rate if it means sacrificing a quality lender. With those in mind, you’ll get the best rate and enjoy lower payments and fewer terms to pay down your home loan faster.