The Refinance Rush



It's not a gold rush but a refinancing race to get mortgage applications approved while interest rates are docile. This is good news for fixed rate mortgage hopefuls getting a Colorado refinance for whatever reason they have - to remodel their homes, to pay a big hospital bill not covered by their health insurance, etc.

But you should be wary of your chances if you're looking at a bad credit score. Lenders are looking at credit scores to determine eligibility for a loan. Yes, there are Colorado refinance companies that will accept your loan application despite a bad credit score, but mind you, you'll be paying higher interest rates than your neighbor who has a good credit score.

The Feds may have cut the rates down another notch, but lenders still stick to indexes, which determine their cap on interest rates. Meaning, if interest have gone down because of the Fed cuts, lenders will still have their way with their interest rates. It will be actually higher than the supposed decline caused by the Fed cuts. If you're itching for a refinance, do your homework first.

Another thing, not all people can get a refinance especially if they are in a sub-prime mess. But you don't have to worry about your chances if you have the prerequisites - a good credit score and mortgage loan payment record. You will enjoy lower interest rates, though you'll have less money because a refinance on your mortgage means you'll have to pay your balance of the mortgage.

Steps To Take

Before going to the bricks, hop online and use the refinance/mortgage calculator to find out if a refinance is within your budget. This will give an accurate idea what how much you're going to pay monthly for a 30-year fixed rate mortgage. Remember that when you take out a refinance, you'll be erasing the number of years you've been paying on your mortgage - that's another 30-year repayment schedule you'll have to live with.

If you think that lending companies are mean when they dump you with a higher interest rate because of your poor credit score, they are erring on the side of caution. Sometimes the idea sucks, but this is business, and Colorado refinance companies have to earn. That's why they are in the business in the first place.

Once you found a company that offers a reasonable rate despite your poor credit score, find out what their fees are on top of the PMI (if you don't have the money for the downpayment of the loan) and origination fees. You're likely to pay property assessment fees, lawyers' fees, etc.

Always ask for the policy for refinancing pre-payment. If they charge you because you have the money to pay your loan earlier, compute their fees and add it to the total refinance bundle. If things look all right to you, ask for a checklist for documentary requirements. Having a complete file of documents will lessen the processing time of your loan.

The key to a successful Colorado refinance loan is your determination to make it work, no matter how difficult it can be at times when there are other urgent and big expenses waiting to be paid. So are you still game?