It’s no secret that the past couple years have been an opportune time to refinance a mortgage as mortgage rates were hitting historic lows. In fact, according to the Mortgage Bankers Association, the average interest rate on a 30-year fixed-rate mortgage was 3.49 percent near the end of July, down from 4.2 percent at the same time last year, and 3.9 percent from January.
Not only can refinancing a mortgage save you money, it can also help you pay off your home quicker, and will even unlock more equity in your home.
If you’re looking to take advantage of today’s low mortgage rates, keep the following items in mind, as they may jeopardize the process.
1. Waiting too long.
While rates have been low for some time now, with some experts predicting they’ll go even lower, the upcoming election may lead to unpredictability. With low rates like the ones we’re seeing today, time is of the essence, so be sure to refinance sooner rather than later.
2. Not being prepared.
When your lender calls or emails asking for information, don’t put it off. Have your documentation and financial information ready so that you can sign it in a timely manner. The last thing you want to do is plan to refinance your home when you’re going to be out of town on vacation, as this will most likely keep you from being able to get everything in place before you’re out of pocket.
3. Not shopping around.
Even if you’re happy with your current lender, it doesn’t mean that you need to stay with them. Shop around and make sure you’re getting the best deal out there. Even a little difference in rates can save a lot of money over the course of a mortgage. If you find a better deal, let your lender know. They may even be willing to match.
4. Adding to your loan term.
When faced with refinancing, some people decide to add to the number of years of their loan term, lowering their monthly payments, but increasing the total amount of interest over time. Conversely, lowering the terms by five or 10 years can save you a lot, so if you want to change the years, make it lower.
5. Forgetting closing costs.
When you refinance a home loan, it’s important to remember that you’ll most likely have to pay closing costs, including a loan application fee, appraisal fees, title fees and attorney’s fees. Be sure you have this money on hand.
By making smart decisions, your refinancing can be a smooth experience.
To learn more about refinancing, contact our office today.
Published with permission from RISMedia.