Mortgage Refinancing Rates - Get the Lowest Rate

Refinancing a mortgage can be confusing. Check out our list of top mortgage refinance questions to become a better educated mortgage shopper.

Q: How do I best compare the offers from different lenders?
A: Three words: Good Faith Estimate (GFE). This standard form will allow you to accurately and fairly compare rates and fees. This gives you the chance to uncover any hidden fees and the true differences between loans. You will also want to look at the APR on the Truth-in-Lending Statement. The general rule of thumb here is that the lower the APR, the less cost associated with the loan.

Q: What is a Good Faith Estimate (GFE)?
A: A GFE is a preliminary estimate of the closing costs and fees for your mortgage. When comparing lenders' offers, make sure that you review this form along with the Truth-In-Lending Statement from each lender.

Q: What is a Truth-In-Lending (TIL) Statement?
A: A TIL is used in connection with the Good Faith Estimate (GFE). A TIL gives you the total cost of a mortgage with the closing costs and fees included. A TIL will allow you to determine if a higher rate with low fees is better for you than a lower rate and higher fees, and vice versa.

Q: When should I lock in an interest rate?
A: You always have the option to lock in an interest rate or float at any time. You must have a property address to lock the rate in with though. However, no one knows or can predict exactly which way the rates will go and when, so the decision to lock or float is completely up to you.

Q: I have seen mortgage interest rates advertised for as low as 1%. Are those real?
A: No - those usually refer to a "payment rate" on a pay-option mortgage. Mortgage lenders lure you in with an impossibly low rate and then add-on a bunch of fees, require specific criteria for the deal, and secretly raise the rate something closer to what you see across the market. It's a classic "bait and switch" approach. There are some loan programs that can offer payments with really low rates, such as pay option adjustable-rate mortages (ARMs). If you don't understand them, then avoid them.

Q: Is there truly a "no closing cost loan"?
A: No. What actually happens is that the mortgage interest rate will adjust in order to offset the costs of waiving the fees or the closing costs are simply rolled into the amount financed.

Q: Can I roll my closing costs into the mortgage?
A: Yes, most of the time you can finance all your closing costs just as long as there is enough equity in your home. Just remember that by doing so your balance will increase, which may also drive your rate up as well.

Q: Where can I find the lowest mortgage refinance interest rates?
A: Start with the mortgage interest rate tables at RateNerd.com to see what current interest rates are. Then you can apply online to get multiple mortgage loan quotes from reputable lenders.