Use a mortgage broker. A mortgage broker will show you mortgage products from different banks and mortgage providers. Pick a mortgage broker carefully. If the broker works directly for a company that offers financial products, make sure he shows you clearly why one of these products is better. Mortgage brokers also get a commission on their sales. Find out what the broker's services include and if he charges any fees. Many brokers do not charge fees beyond their commission. Also check the broker's credentials.
Many financial advisers caution against cash-out refinancing to pay down unsecured debt (such as credit cards) or short-term secured debt (such as car loans). You may want to talk with a trusted financial adviser before you choose cash-out refinancing as a debt-consolidation plan.
When refinancing, don't take the first offer that comes around. Instead you should actively compare both interest rates and lenders.
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.
Pull your credit report from the bureaus and review it for any negative items (late pays, collections etc) and inaccurate detail. Try to dispute negative items and remove them from the report. If required pay off any unpaid debt. Otherwise, you won't get a low rate and may not even qualify. Of course there are lenders in the subprime market who may offer you a bad credit refinance loan, but it's better to avoid them as they'll possible charge higher rates and fees.
