Getting Ready To Refinance

by Bonnie
(USA)

Dear Kate, We are getting ready to refinance our home and first of all I just got my credit scores and am surprised. My surprise was that two of the scores are very close and the other score is not close to them.

The scores are 658, 643, and then 609. Is there a way to ask the low one why they are so different than the other 2 and which one will the lender look at?

If I pay off the two negatives on my report how much will it increase my points and is this a good idea?

I have a loan now and the arm just adjusted. My goal of course here is to get the lowest payment I can possibly get.

My loan is for $350,000 and a major home loan lender quoted me 6.75% which would make the payments $2506.00.

I was hoping to get the mortgage payment down to around $2000.00 a month. Is that possible?

Any advice would be appreciated as I am a novice when it comes to all of this and I think the last time we refinanced we were probably taken advantage in more ways than one.

Thanks, Bonnie

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Hi Bonnie,

I am glad you are pursuing a refinance. The fact that you are taking the time to plan your action is commendable.

Credit scores come from three major bureaus and each bureau may have different information regarding your credit history. For example, one may have reported a collection account that the other two bureaus may have missed. Other times it can be mysterious why one score can be so much different.

That is why lenders generally use the middle score of the three which in your case would be 643. However since mortgage lenders are independent of each other, their preference to a certain score can vary slightly.

Please refer to a series of articles I wrote that might be helpful to you on strengthening your credit. I think you will find many useful tips.

Assuming you were referring to a 30 year fixed rate mortgage, to decrease your mortgage payment approximately $500 a month would mean the mortgage rate would have to decrease to about 5.6%. Please visit my easy home mortgage payment calculator to figure more payments based on different mortgage loan amounts or the years to repay. My only warning is that once you begin to play with my calculator, you might not be able to stop.

Would you also please take a few moments to peruse some articles I have written on refinance. At the bottom of each page, you will find links to further subjects on refinancing.

Also of interest to you is a section on best fixed rate mortgages and another on reducing mortgage closing costs among more tips and advice.

The best way to prevent being taken advantage of again is to educate yourself. This is why I have put countless hours into this website - to help homeowners get their best mortgage rate at the lowest cost.

After reviewing these articles, you may have more questions. My door is always open and I look forward to hearing back from you.

And remember what I say. It is your mortgage and your home. No one cares about it more than you.

Good luck on your refinance.

Best Wishes,



Your Online Mortgage Advice Friend

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