In recent years, many Americans have found themselves saddled with large amounts of debt coupled with high interest rates. One solution for quickly paying off your debt is home refinancing. With mortgage rates lower than they have been for some time, now is a great time to consider this option.

Darren Tolliver, a financial center manager with Fifth Third Bank, uses the following example to illustrate how refinancing can help you pay off your debt. “If you have $10,000 in credit card debt at a double digit interest rate, your monthly payment is likely a few hundred dollars every month,” he says. “If you roll that amount into your mortgage and spread it out over 15 to 30 years, your payment could be significantly less, for example $20 instead of $200 each month.” Additionally, you may consider refinancing to obtain a lower interest rate and ultimately save money on your monthly mortgage payment as well.

Can you refinance?
Your credit score and home’s current value are two factors that will help determine if you are able to refinance and what rate you’ll receive. Avoid being caught off guard by getting this information before going to your bank.

You can obtain your credit score from a number of agencies, including Experian®, TransUnion® and Equifax®. To qualify for the best refinancing offers, you’ll need a score of 740 or higher. If your score is between 620 and 740, you may be approved for a refinance, but you might be required to pay a higher interest rate or more upfront fees. If your score is below 620, consult a financial professional to see what options are available to you.

A real estate professional or state-licensed appraiser can help you determine what your home is worth in today’s market. Many homes have significantly dropped in value due to the recent changes in the housing market. If you owe more than 125 percent of your home’s value on your current mortgage loan, refinancing may not be an option. For example, if your home is worth $80,000, but your mortgage balance is more than $100,000, you may consider contacting your lender to see if you can renegotiate your mortgage rate. A financial professional can also help you find opportunities that are available to you. “It’s often as simple as calling up your lender and asking for a better rate,” Tolliver says.

Compare financial institutions for the best deal
If you decide refinancing is the right choice for you, carefully compare financial institutions to determine which can offer the best terms and interest rate. For refinancing to pay off, ideally, you need to find an interest rate that is at least one percent lower than what you are currently paying. In today’s market, it’s not uncommon to save closer to two percent, depending on when you obtained your mortgage loan.

Also, make sure you read the fine print before signing anything. Some financial institutions offer little or no closing costs, but in turn increase the interest rate you receive so you end up paying more in the long run. “Don’t be intimidated by the process, and take your time to read all the documentation and ask lots of questions,” Tolliver says. “Make sure you are comfortable when you leave the table.”

Refinancing with Fifth Third Bank
If you come to Fifth Third Bank to refinance your mortgage loan, you will meet with a mortgage officer, personal banker or financial center manager to discuss your current mortgage situation. He or she will let you know what rates are currently being offered and how they compare with what you are already paying. If you decide to work with the bank, you will need to complete a short application and provide copies of your tax returns and paystubs.

Fifth Third Bank financial professionals are available to answer your questions about refinancing, every step of the way. “If you are interested in saving money on your mortgage, stop by our nearest location,” Tolliver says. “Even if we can’t save you money through refinancing, we can help you find other options that are right for you.”

To learn more about refinancing, contact Fifth Third at (866) 475-4201 or visit 53.com.

All loans subject to credit review and approval.