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If you have questions about mortgage refinancing, we’ve got answers. (iStock)
Record interest rates have enabled mortgage borrowers to refinance in incredible numbers. According to the latest weekly survey from the Mortgage Bankers Association (MBA), refinancing activity is up 124% compared to the same period last year.
With that in mind, if you’re thinking of joining the crowd, we’ve brought you answers to some common mortgage refinancing questions. Read them to find out what to expect from this process.
1. Is it a good idea to refinance your mortgage now?
In the current context, refinancing a mortgage involves capitalizing on historically low interest rates. The average interest rate on a 30-year fixed-rate loan is currently only 2.79%, according to Freddie Mac. This number is more than a percentage point lower than it was a year ago.
However, it is not known how long these interest rates will last. Although the Federal Reserve appears to intend to keep mortgage interest rates low for the foreseeable future, the Mortgage Bankers Association has reported slight increases in recent weeks. If your goal is to capitalize on record refi rates, it may be best to do so as soon as possible.
If you haven’t yet refinanced your mortgage, you should compare rates and start the application process now. Don’t leave money on the table! Fill out forms online and see how much you could save today.
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2. What do you need to qualify for refinancing?
Qualifying for a mortgage refi is actually quite similar to qualifying for a mortgage loan. in this case, mortgage refinance agents want to see that you have enough income to cover the cost of the new home loan, a decent credit rating, and that you haven’t taken on too much other debt.
If you are refinancing with cash, they will also want to make sure that you have enough equity in the home to borrow.
Want to explore all of your lending options in one place with multiple lenders? Visit Credible today.
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3. Does refinancing reduce your monthly payment?
With refi mortgage rates as low as they are, you can probably save on your mortgage payments by getting a lower interest rate. Simply put, the less interest on the loan each month, the less you will have to pay overall. Plus, if you switch from a 30-year loan to a 15-year loan, you will likely get a better interest rate, which can help you save as well.
That said, there are other ways to lower your monthly payment. For example, if you didn’t make a big down payment when you were a new buyer, but built up home equity over time, you may be able to get rid of your mortgage insurance requirement. private (PMI).
If you want to see how much you can save, use an online mortgage refinance calculator to get a better idea of what your new cost might be. If you’ve decided that refinancing your home loan is for you, visit Credible to find personalized rates and lenders all in one place.
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4. Is it better to refinance with your current mortgage lender?
No, you don’t need to refinance with your current mortgage company, especially if your goal is to get the best mortgage refinance rates. The best personal finance advice we can give you here is to shop around. Unfortunately, banks and lenders will all offer you different mortgage rates and all have different fee structures, which can affect the overall cost of your loan.
For best results, you should get at least three quotes before deciding who to go with for your refinance. Do your best to give each lender the same information so that you are sure to compare apples to apples when quotes are in hand.
If you’re ready to start shopping, Credible can help you compare rates and lenders from the comfort of your own home in just minutes.
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5. Can you negotiate a mortgage refinance offer?
The good news is that certain aspects of your mortgage refinance offer can be negotiated. Specifically, you can make sure that you are getting the best possible interest rate by working to maintain your personal finances. The stronger your demand, the lower your interest rate will be.
However, in addition, it is also possible to negotiate some of the lender’s fees. Just be aware that in exchange for waiving their fees, some lenders will try to charge you a higher interest rate.
When it comes to comparing mortgage lenders, Credible is your go-to source. Credible can help you secure lower rates or put you in contact with a loan officer for additional assistance.
The bottom line
If you think you are ready to refinance your mortgage, the first step is to shop around and compare rates and lenders to find the best lender for your financial situation.
Visit Credible to be put in touch with experienced mortgage lenders who can answer all of your questions about the refinancing process.
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