Take Advantage Of The Low Mortgage Rates
For most homeowners, it's still a good time to refinance. The recent Brexit vote has caused mortgage rates to fall.
Borrowers will even pay less than those who took out new loans last summer.
If you can shave at least 1 percentage point from your current mortgage rate, then refinancing probably makes sense.
Let's say you have a 30-year fixed-rate home loan that's charging 5.6%.
Refinance at current interest rates, and you'll reduce your monthly payments by around $120 a month for every $100,000 you borrow.
The best deal for most borrowers is the one that offers the lowest interest rate, with no points and lender fees of $2,000 or less.
Refinance with a conventional loan.
Property values have increased in most parts of the country, boosting the amount of equity homeowners hold in their homes.
The more equity you have — the difference between the balance on your current mortgage and your home's current market value — the easier it is to refinance.
Borrowers with good credit and 20% equity can qualify for a conventional loan, which is the most common, and usually the cheapest, way to go for most borrowers.
The average cost of a 30-year conventional loan was 4.15% in May, according to Ellie Mae, a California-based mortgage technology firm whose software is used by many lenders.
Borrowers who successfully refinanced their homes had an average FICO credit score of 732 and 32% equity.
It's a great time to refi, but you'll need patience. A little more patience is the one thing you'll need, whatever type of loan you decide to pursue. Lenders are now taking an average of 44 days to process refi applications.
Mortgages remain incredibly cheap but may rise.
Is Now The Right Time To Refinance?
Amy Fontinella, July 18th, 2016
Edited by Barbara Allen
|| Barbara Allen
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