Finding a refinance mortgage rate is just the first step in determining the cost of the loan. Those planning to invest in refinancing will want to learn the total cost of refinancing prior to making the investment. If the cost of refinancing is too high, it can negate the benefit of the transaction.

Getting as much information on the mortgage refinancing prior to investing is important. A variety of online resources are available to help with this search. Knowing the pricing and costs of refinance mortgage rates can help any investor make key decisions. Keep the following in mind when considering these sources and lenders:

1. Examine the low refinancing rates offered to ensure they are up to date.

2. Find refinance rates from all types of lenders including private lenders, commercial banks and specialized commercial mortgage lenders.

3. Learn if the refinancing rates are fixed or adjustable rates prior to investing to assure that long-term goals are met.

Action Steps
The best contacts and resources to help you get it done

Find the best refinance rate

Carefully consider the costs of a refinance. Mortgage refinancing is affordable when rates are the lowest available. The interest rate of a mortgage loan is dependent on the borrower's creditworthiness and the current rates available through the lender. Rates fluctuate at least one time per quarter, but lenders can change rates as they wish. Expect interest rates for mortgage refinancing to range between 4% and 8%, depending on current financial markets.

I recommend: Refinance commercial mortgage loans only after finding the least expensive rates available. BanxQuote is a provider of mortgage loan quotes. Use its service to determine which lender is offering the lowest refinance rates. Yahoo! Finance provides the latest mortgage refinance rates. They also offer advice on market trends, including likely shifts in interest rates in the coming months.

Talk with mortgage refinancing companies about closing costs

While business refinance mortgage rates are important, even low rates may not cover the costs of closing the loan. Closing costs on a mortgage loan rate are traditionally 1% to 4%. These costs include underwriting, title costs, attorney fees and agent fees. Be sure rates are low enough to make the costs worthwhile.

I recommend: Determine the cost of closing from the mortgage refinancing company. Bankrate offers a comprehensive, 50-state estimate of closing costs. Use this tool to get an idea of actual closing costs. The U.S. Department of Housing and Urban Development (HUD) also provides educational material for real estate buyers and refinancers to determine the costs of closing or settlement.

Estimate current refinance rates associated with appraisal costs

Even with the best mortgage refinancing rate, it is essential to consider the amount of equity available in the property. Investors hoping to take equity out of the property's value will need to ensure there is enough equity through an appraisal. Lenders will want an appraisal done to ensure the real estate's value is high enough to cover the cost of the loan. Appraisal costs range widely based on location and property type. Expect to pay between $300 and $1,500 for the appraisal.

I recommend: Seek out a low refinancing rate to keep prices low. Prior to establishing a loan quote, though, ensure the property's value is high enough. Use Zillow to determine a basic value on the property. This free service provides instant information based on the value of comparable property just sold in the local area. Use Commercial Property Appraisal to find local appraisers and to get a preliminary appraisal.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Don't forget to consider local mortgage lenders. The current refinance rate advertised nationally may not represent local, small banks. Many of these banks provide sizable loans, including refinances to local investors.

Interest rates fluctuate, and refinancing rates that are lower than your current rate could lower your mortgage payments significantly, leaving more money available for other investment in your business or home.

An illustration of how low refinance rates can positively affect your cash flow is if you refinance $250,000 for 30 years at a fixed rate of 5%, your payment would be $1,419.47; the same loan at a 6% interest rate would cost you $160.70 more each month.

Some reasons for mortgage refinancing are:

1. Your current mortgage rate is considerably higher than the new low refinancing rates.
2. You have a balloon note and are required to refinance.
3. You've accrued equity and would like to refinance to provide extra cash for building improvements or other reasons.
4. To convert your adjustable interest rate to a fixed refinance mortgage rate.

Action Steps
The best contacts and resources to help you get it done

Stay current with available refinancing rates

Keeping up with the interest rates is a good way to know when to refinance your home. The economy affects mortgage rates and your payments rise with the rates if you have an adjustable rate mortgage.

I recommend: Stay abreast of current mortgage interest rates at Bank Rate. Calculate your refinance mortgage rate with a mortgage calculator at Mortgage-calc and find other financial calculators from the CCH Financial Planning Toolkit.

Find out all the costs associated with mortgage refinancing

Ask your broker for his current mortgage interest rates and see if the rates are fixed or adjustable. Also, you will need to know the annual percentage rate (APR), which takes into account the interest rates, fees and other charges.

I recommend: Get refinance mortgage rate quotes from lenders at Mortgage Quotes. Learn what the current APR is in your area at Century21.

Paying points may give you the best refinance rate

Fees paid to a mortgage refinance company are called points. One point is equal to one percent of your loan amount. These fees are usually paid at closing. The amount you pay for points is tax deductible for a new loan, but not for a refinance. Also, ask your mortgage refinancing lender if there are other fees related to your points. In some cases, you may come out ahead by paying points.

I recommend: Mtg-net may help you decide if paying points is a wise decision. Mortgage 101 offers a calculator to compare costs associated with paying points for a lower refinance mortgage rate.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Compare refinance rates between online mortgage refinancing companies and your local lenders.
• •  Often lenders will give you a low refinancing rate if you finance for a shorter term.

Refinancing rates are traditionally similar to home mortgage rates. The process of refinancing is simply the paying off of one mortgage loan to obtain another. These loans are widely available through most mortgage lenders. An investor should consider comparing lenders to find the lowest rates available. Making the most of a refinance mortgage rate may mean saving money.

Making the most of refinance mortgage rates is easy to do online. Finding low rates can help an investor get the most out of the property possible. By taking a few extra minutes to research mortgage rate options, an investor may be able to save substantially. When comparing lenders, keep these things in mind:

1. Look for the best refinance rate offered by a solid lender that is not likely sell the loan.

2. Determine if mortgage refinancing is affordable after factoring in the closing costs.

3. Find refinance rates from reputable sources and those that update them frequently.

Action Steps
The best contacts and resources to help you get it done

Gather quotes on current refinance rates

Investors can research the refinance mortgage rate available from most lenders online. Quality resources provide the advertised rate of most lenders. This rate is often the best rate available and given to well-qualified buyers. Use quotes from lenders to determine the actual rate charged. Take advantage of the lowest rates, especially when interest rates are dropping.

I recommend: Locate business refinance mortgage rates from trusted third-party providers. This allows for an easy comparison of the going rate and increases your ability to find the low refinancing rates. RealtyRates provides the current rates for commercial loans of all types, including refinance mortgage loans. Steelhead Capital displays available interest rates on its website. These are updated as often as rates change. BuyerZone allows investors to make quotes to access the current market.

Refinance commercial mortgage loans to cash out equity

Loan holders with sizable equity in their real estate can cash out that equity for multiple purposes when they refinance. Mortgage holders should consider an appraisal of the property to ensure the value is high enough to warranty refinancing. Keep in mind that closing costs can amount to between 1% and 4% of the refinanced amount, cutting into the equity.

I recommend: Work with mortgage refinancing companies to determine equity or hire a third-party appraiser to provide a value estimate. Commercial Property Appraisers provides commercial and investor property appraisals. Locate an appraiser or get an estimated property value when possible. Zillow provides an estimated valuation of real estate based on current, local real estate sales and property records. The service is free and you get instant results.

Negotiate with the mortgage refinancing company to get the lowest rate available

The best mortgage refinancing rate may not be advertised. Some lenders will negotiate with borrowers that are well qualified. Negotiate the rate down by offering a larger down payment or by paying points. Inform lenders of other, lower quotes obtained. They may be able to beat them.

I recommend: Talk with lenders directly about the low refinancing rate they offer. Gather information prior to speaking with them, including quotes from several lenders. MortgageLoan allows individuals to compare rates by obtaining quotes from several lenders. American Loan Search provides rate quotes from top commercial mortgage lenders.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Monitor news sources and the Federal Reserve to find out if future rate cuts will happen prior to refinancing. If rates are expected to be cut, wait for them if possible. If rates will likely rise, refinance sooner by contacting a lender and asking for a locked in rate for the refinancing.

Refinancing a mortgage is a similar process to obtaining a mortgage on the property initially. However, there are a few key terms that you'll be dealing with when completing a mortgage refinance. Here are some terms with quality resources to help you along the way.

Action Steps
The best contacts and resources to help you get it done

Rate and term refinance

A rate and term refinance refers to a new loan that is secured to replace an old loan, in which only the rate and term of the loan is changed. A rate and term refinance loan is popular for borrowers looking to secure a better interest rate over a longer period of time.

I recommend: The Truth About Mortgage.com has an informative article discussing rate and term refinance.

Pre-payment penalties

A pre-payment penalty is a fee assessed by the lender from the borrower if they pay off their loan before the end of the term. Many loans that are re-financed have a pre-payment penalty component in them so that the new lender is guaranteed a minimal return on their investment. When shopping for refinancing, be sure to take any potential pre-payment penalty into consideration.

I recommend: Visit Mortgages.com for an article explaining the concept of pre-payment penalties.

Home or property equity

Home equity, or property equity, refers to the difference between the value of your home or business location and the mortgage being held against it. Home equity is calculated at the time of refinancing by having the home or business appraised. Depending on market conditions, the equity may be higher or lower over the course of time. Most refinancing loans will not let a borrower refinance unless they have at least 5% and optimally at least 20% equity in the property.

I recommend: Visit the Federal Reserve for a further discussion on home equity, or property equity, and how it relates to the process of refinancing.

Cash-out refinance

A cash-out refinance refers to a new mortgage that might have a different interest rate or term, but primarily raises the amount of the mortgage for the borrower. A cash-out refinance is popular for borrowers who have a large amount of equity, but who have a large expenditure in the near future. For instance, a business might do a cash-out refinance to purchase new commercial machines in order to help their business grow. A cash-out refinance is usually favorable to placing such purchases on a credit card because of tax breaks and lower interest rates.

I recommend: Get Smart.com has a further discussion of refinancing terms as well as more information about a cash-out refinance.

Points

The term points refers to paying a piece of the overall interest during the closing of the loan in order to get a better interest rate over the life of the loan. One point equals 1%.

I recommend: Visit the website for Mortgage Loan.com for more information regarding points.

No seasoning

No seasoning refers to a refinance from a new lender that does not require the borrower to have held the previous mortgage for a period of time. This is commonly found in investment properties where businesses have the option to get a better interest rate. Conversely, seasoning means that a borrower must have held the previous mortgage for a certain amount of time.

I recommend: Visit Mortgage QnA for additional information on a no seasoning refinance option and how it works.