Considering Refinancing? Now is the Time!

Considering Refinancing? Now is the Time!

With the current economic situation throughout the United States, many people are unemployed or have taken pay cuts due to across the board budget cuts. As a result, homeowners are experiencing high mortgage payments that leave them struggling to make ends meet. Therefore, refinancing has become very appealing over the last year as interest rates fall to record lows-allowing homeowners an opportunity to reduce their monthly mortgage payments.

What is Refinancing?

Essentially, when you refinance your home you pay off your existing mortgage payment with a higher interest rate and replace it with a second loan with a lower interest rate. When this occurs, the homeowner is left paying a lower monthly mortgage payment than before.

What are the Current Mortgage Rates?

Fortunately for those seeking to refinance, now is the perfect time! The current 30-year fixed mortgage rate is 4.09% and the 15-year mortgage rate is 3.30% according to a report by Freddie Mac. These are record low numbers that are perfect for those seeking to buy a new home or refinance.

What are Essential Factors?

If you are seeking to refinance your home then you have to go into the process well-prepared. When interest rates decline and hit record lows, many lenders raise their interest rates internally to manage the high refinancing demand. When this occurs, the rates between lenders vary greatly, requiring the homeowner to shop around for the best interest rate.

Furthermore, many people considering refinancing completely underestimate the importance of having a high credit score. Especially with the new lending standards, high credit scores are essential and many homeowners with high credit scores are actually being refused mortgages.

Along with having a high credit score, homeowners need to be realistic about the current value of their home-as many people tend to overestimate the value due to the recent changes in the real estate market that have driven home prices down as foreclosure rates climb.

In the end, now is an incredible time for refinancing if you desire to lock in a lower interest rate and are well-prepared for refinancing. Make sure you have all of the essential documentation when you submit your request for refinancing to your lender to help ensure a smooth process that increase your chances of approval. With interest rates reaching record lows, act quickly as these rates may not last forever!


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