Even with some mortgage refinancing rates below 3%, consider these 8 things before refinancing your mortgage.

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Mortgage refinance rates are very low right now, with some rates starting below 3% at the time of writing (you can compare today’s best refi rates here). Indeed, “while rates fluctuate continuously, they have reached record levels this year,” said Alfredo Padilla, spokesperson for Wells Fargo. Plus, many experts expect interest rates to rise this year, so maybe it’s time to act. Where is it? We asked various experts how to know when mortgage refinancing is right for you.

Do this calculation: “If you can cut your rate from half to three-quarters of a percentage point and plan to stay in your home for more than three years, consider refinancing,” says Greg McBride, chief financial analyst at Bankrate.
(Find the best mortgage refinance rates in your area here.)

For example, “Today, a borrower with excellent credit can get a 30-year mortgage at around 3%. If this describes you, you could benefit from refinancing if your current loan has a rate of 3.75% or more. For people who plan to stay in the home for several years, it may be a good idea to refinance if it means reducing the interest rate by just half a percentage point, ”says Holden Lewis, home and mortgage expert. in Nerdwallet.

And this calculation:
Lauren Anastasio, Certified Financial Planner at SoFi, explains that refinancing typically costs 2-5% of your principal loan amount. “Make sure the math is checked to make sure your refinance will save you money. How long you plan to own the home can determine whether refinancing is worth it, ”says Anastasio.

See what type of loan you have: McBride says now is the time to trade that variable rate mortgage for the certainty of a fixed rate. “The fixed rates today are lower than what many variable rate loans would reset to, and that will only get worse in the years to come with interest rates likely to rise,” says McBride.
(Find the best fixed mortgage refinance rates here.)

Compare the prices: It is essential that you not only look at the rates of several lenders –find the best mortgage refinance rates in your area here – but also that you take into account the closing costs, the origination costs, the evaluation costs, the title search costs, the administrative costs and the attorney’s costs where applicable.

Consider a refi on a HELOC: If you are looking to leverage your home equity, you may want to do so with a buyout rather than a home equity line of credit, says McBride, “Consider refinancing with cash. You’ll get a lower fixed rate without worrying about future increases and can lower your current mortgage balance rate.

Shorten the term of your loan to 15 years: If you think you will live in your home forever, and paying off your mortgage in full is one of your financial goals, you might be tempted to use a 15-year mortgage. “A shorter term can save you a significant amount of money over the life of your mortgage if you can comfortably afford the change in monthly cost. Shortening your term will likely cost more monthly, but can save you thousands of dollars in interest over the life of the loan, ”says Anastasio.
(Find the best 15-year mortgage refinancing rates here.)

Give up your FHA mortgage insurance with a refi: Some people refinance to get rid of Federal Housing Administration (FHA) mortgage insurance. Here are the details on how to do it. “They should wait until they have 20% equity,” advises Lewis about when to make the move.

Talk to a mortgage broker: Don’t you want to do all the homework yourself? A mortgage broker who acts as an intermediary between you and the bank can help you apply for loans and find competitive interest rates. They are independent from specific banks and tackle a large part of the process, including extracting documents and negotiating terms. Asking friends or family for references they’ve used is a great way to find a broker, but there are also services online that can help make an introduction with a broker easier.

See also: 9 mistakes too many Americans make when trying to get a home loan


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