Tips And Works

Some see the end of low interest rates. Here's what you need to know to get the best deal on a mortgage refinance.

NEW YORK (CNNMoney.com) -- Interest rates on 30 year mortgages are above 6% - their highest levels since March. Is the end of low interest rates on the horizon? Here are some top tips on what you need to know if you want to refinance.

Today's interest rate is at 6.08% according to Freddie Mac. Just last week that rate was at 5.58%.

That has a lot of people wondering if they've missed the ideal time to refinance. Let's take a look at what's driving the run-up.

Issue number one here is inflation concerns. Some economists think the Federal Reserve will begin raising interest rates later this year to fight the growing threat of inflation.

Remember, the Fed has cut rates seven consecutive times since last September. The party can't last forever.

It's not too late to refinance. In fact, it's a great time to get your refinance approval now.

That means gathering up your bank statements and tax returns.

You'll beat the wave of applications that generally flood the market when rates dip a bit.

"Everyone wants to find the bottom of the market," says Bob Moulton of Americana Mortgage.

Remember, it can take weeks for an application to be approved, so you'll be ahead of the game. Then once the rate hits your target level, lock it in.

A lot of people are afraid that their house will be appraised lower than what they thought. And a lot of folks may have to cover that gap in closing costs.

If that's what you're worried about, make sure you scrutinize the appraisal.

First, make sure your lender doesn't use an automated valuation models, but instead sends an appraiser to your home. Also, make sure you get a full appraisal, meaning someone comes into your house and takes pictures and talks to you about special features, like a finished basement or new cabinets.

If you have a good credit score, your lender is more likely to use a "drive-by" appraiser says Jim Amorin of the Appraisal Institute.

That's because if you have a good credit score, the lender doesn't need to take full stock of your collateral.

On the other hand, if you have poor credit, the lender will be more diligent.

First, go to the lender who you have your current mortgage with. It could save you a lot of paperwork off the bat.

But if you think you can get a better deal elsewhere, look for a lender like a bank or a credit union.

A recent study prepared for by the Department of Housing and Urban Development found that loans arranged by brokers typically carried higher fees than those that were gotten directly from lenders.

For brokered loans, the average fees were $4,000, compared with $3,150 for loans made directly by the lender.