Mortgage rates have been fluctuating over the last several months, from an all-time low in early January to a 10-month high in early April.
According to a popular survey, the average 30-year fixed mortgage rate is revolving around 3%, which has opened up refinance opportunities for millions of homeowners.
Even while the rates vary from one lender to another, if you follow the following tips it will help you in getting the best deal when refinancing into a fresh 30-year mortgage.
COLLECT MORTGAGE OFFERS AND COMPARE RATES
If your current mortgage is new (1 – 2 years old) then refinancing into another 30-year loan can be a good choice, because you won’t be stretching out your interest costs that much.
According to the weekly survey from mortgage giant Freddie Mac the 30-year fixed-rate mortgages are currently averaging at 2.95%, which was at 3.15% same time last year.
If you took out a mortgage in 2019 when average rates went as high as 4.5% then you could be benefitted from a refinance now.
Shop around and compare rates from several lenders to get the best possible rate.
According to the Freddie Mac study if you gather 5 rates then you’ll be saving on an average of $3,000.
According to recent research from the mortgage technology and data provider Black Knight, close to 14.1 million Americans still have an opportunity to refi and drop their interest rates by at least 0.75%.
When you calculate it shows a saving on an average of $287 a month.
POLISH UP YOUR CREDIT SCORE
A good credit score guarantees good mortgage rates. Borrowers with credit scores of 740-to-799 are considered very good and 800 to 850 are considered exceptional.
Black Knight says, if you have a score of at least 720 you will get the kind of refinance loan that will save you hundreds of dollars a month.
If your credit score needs help, follow these steps and raise it:
- Pay down your credit cards and other debt. To help you get rid of credit card debt more quickly, use a debt consolidation loan as you get it at much lower interest.
- Don’t open new credit cards, neither close old ones. When a card is canceled it reduces your available credit and also hurts your score.
- Check your credit reports to be sure there are no errors pulling down your credit score.
HAVE A GOOD HOME EQUITY
If you have healthy amounts of equity in their homes when you are seeking to refinance then you tend to score the best refinance rates.
Black Knight says an ideal refi candidate has at least 20% equity.
If it is possible to reach the 20% level, making a mortgage down payment will put you over the line.
Neither would you need to buy or keep paying for private mortgage insurance?
BE WILLING TO PAY 'POINTS'
An upfront payment that can help you bag a low 30-year mortgage rate is the optional fees also known as “discount points“.
One point equals 1% of your loan amount so it will cut your rate by as much as one-quarter of 1 percentage point, eg. from 3.2% to 2.95%.
Points are the best way to secure jaw-dropping mortgage rates.
If you intend to move from the given home soon then a refi may not be the right move because you need time to break even on the points and other closing costs before actually enjoying the savings from your low mortgage rate.
Reference Source: Yahoo Finance
https://www.compareclosing.com/mortgagenews/this-is-still-a-good-time-to-refinance/
The national rate average for 30-year fixed-rate refinances grew.Whereas the average rate on 15-year fixed refinance and 10-year fixed refinance mortgages remained unaltered.The refinance interest rates keep changing every day.
If you are looking to refinance your existing mortgage, this may be a perfect time as they are still comparatively low.The average 30 years fixed refinance increased by 3 basis points from last week at 3.13% to today’s interest rate of 3.16%.The average 15 years fixed refinance rates remained the same as last week at 2.42%.Unmoved from the week earlier the average 10-year fixed refinance rate is at 2.43%.You can still discover the right refinance for you.According to Freddie Mac’s weekly survey, in early March, the mortgage rates inched above 3% for the first time since July 2020.They feel the phase of record low rates could end soon.Whereas some experts predict the rates to stay low and will gain speed in the second half of the year.In the long-term refinance rates depend on factors like inflation and economic recovery.2020 was a historically excellent period to refinance as rates had never been that low.But since the onset of 2021 mortgage rates have inched up and crossed the 3% threshold for the first time since last summer.Reference Source: Next Advisorhttps://www.compareclosing.com/mortgagenews/todays-refinance-rates/
If you are thinking about investing in your own home office, consider refinancing to access equity.
This may just increase the value of your house over time!
If you are looking to make your financial situation more stable by using the equity in your home, talk with a mortgage broker today for advice on what will work best.
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