Although rates have been creeping upward - by exactly .25 percent after the Federal Reserve met December 14 - rates are still low.
If you haven’t heard it on the radio or read about it in the news, maybe your mortgage banker has already reached out to you about it – historically low interest rates are here now and no guarantee they’re here to stay. That being said, the decision to refinance your home loan has probably come to mind.
So you’ve ordered an appraisal on a property, or perhaps you’re having your property appraised for a refinance or before you put it on the market.
If you’re selling or refinancing your home, you anticipate having your home appraised. An appraisal may be intimidating to some, but you really shouldn’t sweat it.
It’s been blasted across the news, airwaves, and through social media, and we now know that the Brexit has resulted in record low rates for thirty-year mortgages – but what does it really mean?
The beginning of 2016 ushered in a drop of interest rates, thereby increasing the number of people eligible for refinancing, according to the housingwire.com.
The mortgage industry is full of misconceptions and misunderstandings. New homebuyers often go into the mortgage process expecting many things that just don’t happen, and even individuals who are already homeowners may have misconceptions about the mortgage industry. Today, we’re out to tackle the “refi lie.”
The rumor: In order to get a refinance, your new rate must be a minimum of 2% lower than your current rate.
The truth: No one really knows where this rumor came from, or when it started, but the truth is – it’s not true.
You can apply for a refinance for a variety of reasons – it’s not always a better rate – and you don’t even necessarily need to get a better rate in order to refinance. Homeowners refinance for a wide array of reasons. Maybe you are simply looking to lower your monthly payments by stretching out your loan for a few more years, or maybe you’re looking to pay your loan off earlier and make higher monthly payments.
Maybe your decision to refinance has little to do with interest rate or payment – you might need to do some home renovations, or even need to finance part of your child’s education. So what do you need for a refinance? Well, your mortgage banker can answer that question. However, you can learn more about the refinance process here, and learn about what documentation you’ll need to get started.
Refinancing is a great option for homeowners who are interested in lowering their rate, lowering their monthly payment or both. However, despite those interests, there is another part of the equation that is crucial – the market.
According to recent data, current interest rates are perfect for homeowners who are interested in refinancing. During the first quarter of 2015, refinances accounted for 63% of all single-family loan originations, according to Freddie Mac.
Freddie Mac deputy chief economist, Len Kiefer, said, "Many homeowners took advantage of low mortgage rates by refinancing in the first quarter of 2015. Relatively younger loans refinanced as the median age of a refinanced loan declined to 5.6 years, down from 6.8 years in the prior quarter. Refinance borrowers are primarily looking to reduce payments and pay down principal faster.”
Kiefer went on to say that an estimated $1.4 billion will be saved in interest payments, solely based on those borrowers who refinanced in the first quarter of 2015.
Ready to start your refinance? Talk to a mortgage banker today – 1 (888) 914-2276.
Homeowners choose to refinance for two main reasons: for a lower rate, or for a monthly payment adjustment. The refinancing process is similar to the mortgage process concerning the steps, the documentation and the overall progression of the loan. So, when you’re looking into refinancing your home, you will already have a good idea of what to expect based on your original home loan origination. However, while the process is very similar, there are three key things that you can do to ensure that your refinance stays on track and closes as soon as possible.
- Documentation – Consider having your necessary documentation together before you apply for your refinance. The documents that you will need for your refinance are often the same ones you used for your original mortgage. To find out what documents you will need, check out our documents checklist.
- Transparency – Be transparent about your current financial situation and make sure your mortgage banker is aware of any potential obstacles. Chances are, if your mortgage banker is aware of issues before beginning your refinance, they can better direct you on how to fix any problems.
- Consistency – Just like with during your original mortgage process, make sure that nothing significant changes in your financial situation during the time you are trying to refinance. Make sure you remain up to date on all of your current debts and don’t apply for any new credit until your refinance is completed.