How do I get low refinance rates?

It’s not hard to find ads for low mortgage refinance rates. But, when it comes to getting a specific quote, what you pay will depend on a number of factors. Here’s what you need to know.

Check your credit score

Your credit score represents the risk you present as a borrower. The higher your score, the lower the refinance rates you’re likely to be offered. If you have a low score, pull your credit report ahead of time to deal with any issues, such as errors and late payments.

Pay points

Even if your credit score doesn’t get you the lowest refinance rates, you can choose to pay points to lower the rate instead. A point is equal to 1 percent of the loan amount, paid at closing in cash.

Choose a different term

If you go with a 15-year mortgage rather than the standard 30-year fixed, you’ll pay less interest. However, a 15-year mortgage means higher monthly payments because you’ll be paying off the loan twice as fast. Another way to get lower refinance rates, for a while at least, is an adjustable-rate mortgage. On these, the interest rate starts low and stays low for a few years. Beware, though, because the rate can rise quickly once the mortgage resets.