Rate Roulette: Is It Time to Spin the Refinancing Wheel?

June 20, 2024 | Read Online

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Hello Homeowners!

With everyone discussing interest rates, you might look at your mortgage rate and wonder if you could save money. Especially if your rate is between 6% and 8%, you might consider refinancing to try to get a better deal!

REFINANCE?
Is It Time to Refinance Your Mortgage? Top 3 Tips to Know!

3-minute read

A Quick Look at Refinancing Trends

Last year, fewer people refinanced their homes than in the previous 30 years, with only $75 billion and $80 billion in loans during the first two quarters. This drop happened because interest rates went up. Despite this, is there still a chance to save money by refinancing?

Here's When Refinancing Could Make Sense for You

Watching for Rate Drops

If interest rates fall by just 0.5% below your current pay, you should talk to your lender. Even this tiny decrease could help you save a lot of money each month, especially if you plan to stay in your home for many years.

Remember that refinancing involves some costs, but these could be small compared to the amount you might save over time. However, expect interest rates to stay below 6% for a while.

Ready to Cover Upfront Costs?

Refinancing your mortgage isn't free. Last year, the average cost for these fees was about $2,375. It's usually better to pay these costs immediately rather than add them to your loan amount. If you add them to your loan, you'll pay more interest over time. So, you should ensure that what you save by refinancing is more than what you spend on these upfront costs.

Have an FHA Loan?

Refinancing might save you a lot of money if you have an FHA loan. FHA loans are good because they let you buy a home with a smaller down payment. However, they also include a mortgage insurance premium (MIP) that costs about $150 monthly for an average loan. If you refinance, you could eliminate this extra monthly cost, lowering your overall monthly payments.

Is Now the Time to Refinance Your Mortgage?

Set Your Expectations Right

Did you recall when mortgage rates were low, around 2% to 3%, during the early pandemic? Those rates were unusual. Higher rates are likely to continue for a while. It's essential to adjust your expectations accordingly.

Is It Time to Refinance?

Everyone's situation is different. Refinancing your mortgage could save you a lot of money, but it depends on when you first got your loan, how much the interest rates have dropped, and how long you plan to stay in your house.

Want to learn more without the confusing words? Click [HERE] to read our full article and make your next move amazing!

Keep your savings in step,
Your Real Estate News Rumba Partner

P.S Remember, the early bird gets the worm, but the smart bird gets the savings! Visit our site for the latest refinancing deals.😎

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