Saving money through a mortgage refi is more than just finding the lowest interest rates. You can further cut fees and costs through the structure of your loan, avoiding PMI, and buying lower interest rates.

Close Credit Card Accounts

Close inactive credit card accounts to improve your credit score, making you eligible for lower interest rate loans. You will need to notify the credit card companies in writing that you wish the accounts closed on your request.

Next, check your credit report after 30 days to be sure closed accounts include the comment “Closed at Customer’s Request.” You want future lenders to know it was your request and not bad credit that closed your accounts. Also, take the time to check for any mistakes in your credit report that could negatively impact your credit score.

Avoid The Hidden Cost Of PMI

When refinancing a mortgage, as many as 30f homeowner’s cash out part or all of their home’s equity. By investing in home improvements or paying off credit cards, this can be a smart. But, if you are borrowing more than 80f your home’s value, you will be hit with private mortgage insurance, costing you hundreds a year.

Pay Points Now

If you are planning to stay in your home for several years, then you can save money by paying points for lower interest rates. You pay up front fees to ensure you have lower interest payments over the course of your loan. Remember, this only works if you keep your mortgage for several months.

Choose A Short-Term Loan

Short-term mortgages offer lower interest rates than long-term mortgages. You save money by the lower interest rates and shorter payment period. The trade off is a larger monthly payment, but this option can save you thousands.

Ask About Fees

Fees are a hidden cost of many mortgage loans. By law, lenders must disclose fees within three days of a loan application. Fees can go by many names like – document prep fees, courier fees, administrative fees, and more.

When comparing refi options for your mortgage, request a list of fees from several lenders. Add these fees with the interest of a loan. With these figures, you may be surprised that the cheapest loan didn’t have the lowest interest rate.