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Is It Time to Refi to the Best Mortgage Rates in Decades?

Is It Time to Refinance to the Best Mortgage Rates in Decades?

Those looking to purchase a home or refinance their existing mortgages have the opportunity to take advantage of the best mortgage rates in decades. While current mortgage rates are attractive to those seeking to lower their monthly mortgage payments, there are several factors to consider and steps to take before it is time to approach a lending company regarding refinancing.

Is It The Right Time to Refinance?

Determining whether it is the time to refinance a home involves more than simply comparing interest rates. Sometimes it is better to maintain a current rate of interest rather than take on the cost of refinancing for a marginal reduction in monthly payments. It is generally a smart idea to refinance an adjustable rate mortgage to a fixed rate mortgage. This is especially true with the best mortgage rates that will likely be seen for years currently being offered. Where the waters get a bit murkier involves refinancing from one fixed rate mortgage to another fixed rate mortgage. It is sometimes not worth the loans closing costs to refinance to a lower rate. Closing costs can be several thousand Dollars. If those seeking to refinance will not be in their homes long enough to recoup this expense, it is often better to keep their current rates. A loan officer at the lending company will be able to better assess each individual situation, as everyone’s situation is unique.

What to Do Before Refinancing?

It is no secret that those with excellent credit can often receive more favorable interest rates than those with a lower credit score. For this reason, before approaching a lender, those seeking to refinance should address do everything they can to shore up any potential problems with their credit. Reducing the balance of any revolving credit accounts such a credit card is always an excellent idea, but applicants should go the extra mile by requesting a copy of their credit reports and addressing any outstanding accounts. In addition, applicants should ensure that they continue to make timely payments, even if they plan to refinance soon. Applicants should ensure that loan officers will have no reason to hesitate when considering approving a refinance request.

Refinancing a mortgage is not a decision to be made lightly or quickly. The pros and cons of abandoning fixed mortgage rates in favor of the current mortgage rates should be weighed before signing anything. Responsible homeowners will take the time necessary to weigh their options and repair any flaws in their credit history before they even approach the lending company. Yes, the best mortgage rates in decades are available, but only those who are prepared will be offered those rates.