If you have questions about mortgage refinancing, we have the answers. (iStock)
Record interest rates cause mortgage borrowers to refinance in incredible numbers. According to the most recent weekly survey by the Mortgage Bankers Association (MBA), refinancing activity grew 124% over last year.
With that in mind, if you are thinking of joining the crowd, we have provided answers to some common questions about mortgage refinancing. Read them to know what to expect from this process.
1. Is it a good idea to refinance your mortgage now?
Refinancing mortgages in today’s environment is all about capitalizing on low interest rates. The average interest rate on a 30-year fixed-rate loan is currently only 2.79%, according to Freddie Mac. That number is more than a percentage point lower than a year ago.
However, there is no telling how long these interest rates will last. Although the Federal Reserve appears to intend to keep mortgage interest rates low in the near future, the Mortgage Bankers Association has reported slight increases in recent weeks. If your goal is to capitalize on low refi rates, it may be better to do so sooner or later.
If you have not yet refinanced your mortgage, you should compare rates and start the application process now. Don’t leave money on the table! Fill out some online forms and see how much you can save today.
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2. What do you need to qualify for refinancing?
Qualifying for a refi mortgage is actually quite similar to qualifying for a mortgage. in that case, mortgage refinancing agents want to see if you have enough income to cover the cost of the new loan, a decent credit score and if you have not taken on many other debts.
If you are doing a withdrawal refinance, they will also want to see if you have enough accumulated equity in the home to borrow.
Do you want to explore all your loan options in one place, from multiple lenders? Visit Credible today.
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3. Does refinancing lower your monthly payment?
With mortgage interest rates as low as they are, you can probably save on mortgage payments by guaranteeing a lower interest rate. Simply put, the less interest accrued on the loan each month, the less money you will have to pay overall. In addition, if you switch from a 30-year loan to a 15-year loan, you will likely receive a better interest rate, which can also help you save.
That said, there are other ways to reduce your monthly payment. For example, if you did not make a large down payment when you were a new buyer, but accumulated equity in the home over time, you can get rid of the private mortgage insurance (PMI) requirement.
If you want to see how much you can save, use an online mortgage refinancing calculator to get a better idea of what your new cost might be. If you have decided that refinancing your home loan is right for you, visit Credible to find personalized rates and lenders 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 refinancing rates. Here, the best personal finance advice we can give is shopping. Unfortunately, banks and lenders offer different mortgage rates and they all have different rate structures, which can affect the overall cost of your loan.
For best results, you should obtain at least three quotes before deciding who to refinance with. Do your best to give each creditor the same information so that you can be sure that you are making an accurate comparison when you have quotes in hand.
If you’re ready to start shopping, Credible can help you compare rates and creditors from the comfort of your home in just minutes.
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5. Can you negotiate a mortgage refinancing offer?
The good news is that it is possible to negotiate some aspects of your mortgage refinancing offer. Specifically, you can guarantee that you will receive the best possible interest rate by working to put your personal finances in good shape. The stronger your investment, the lower your interest rate.
However, in addition to that, it is also possible to negotiate some of the lender’s fees. Be aware that, in exchange for exemption from their fees, some lenders will try to charge a higher interest rate.
When it comes to comparing mortgage lenders, Credible is your source of reference. Credible can help you secure lower rates or get you in touch with a credit officer for further assistance.
The final result
If you think you are ready to refinance your mortgage, the first step is to research and compare rates and lenders in order to find the best lender for your financial situation.
Visit Credible to get in touch with experienced mortgage lenders, who can answer any questions you have about the refinancing process.
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