Is Now a Good Time to Refinance Your Home?
When you applied for your home loan, you received an interest rate and loan terms that were standard at that time. As the economy changes and mortgage rates fluctuate, many homeowners look for ways to benefit from those changes. Refinancing your mortgage can help you save money, but you have to choose the right time. So, is 2020 the right year to refinance your home? Yes, but there are some things you need to know.
Interest Rates Are Currently Low
Current interest rates are incredibly low. This gives you the opportunity to refinance your home and save on interest payments for the life of your new loan. The lower your interest rate is, the lower your monthly payments will be which can help make this uncertain economic time more bearable.
Think about the rates of your current mortgage. If the rate you have is much higher, refinancing is a smart decision. Keep in mind that rates can go back up at any time. The best way to lock in the current low rates is to apply as soon as possible.
Refinancing Isn’t Always Worth It
This year is an ideal time to refinance your home, but only if you plan to stay in the house for at least a few more years. When you refinance, you’re getting an entirely new loan. This means you’re going to have to pay the fees for that loan just like you did with your original mortgage.
If you’re planning on selling your house in the near future, paying those fees isn’t in your best interest. After all, you’ll be applying for a new mortgage for your new home soon enough. However, if you’re planning on staying in your house for the long-term, refinancing is almost always worth the upfront cost.
The Process Will Be Easy
When you applied for your first mortgage, you likely found the application process intimidating. Now that you’ve done it before, you’ll know what to expect and will likely find it easier and faster. However, since mortgage rates are so low, banks and lenders are being more selective about the people they offer loans to. If you have low credit or high amounts of personal debt outside of your mortgage, you may find it harder to refinance your home.
Discover Your Options
If refinancing is something you’re interested in, the sooner you start looking into your options, the better. Contact us today to discuss your current loan and see if deciding to refinance your home is in your best interest.