Is now a good time to refinance?

Is now a good time to refinance?

Mortgage and refinance rates have been rising, but that doesn’t necessarily mean you should rush to buy soon if you aren’t financially prepared.

Mortgage Calculator

does chase give personal loans

“An uptick in rates, followed by increased volatility driven by geopolitical events, has made for one of the bumpiest weeks for rates in some time,” says Robert Heck, vice president of mortgage at Morty.

Mortgage rates are at their highest levels since the COVID-19 pandemic began. But they’re still lower than they have been in years past, so if you lock in a rate today, you could get a comparably good rate.

“We should keep in mind that rates below 4% are still relatively low by historic benchmarks, and we saw rates as high as 5% as recently as ,” Heck says.

The US is a seller’s market right now, meaning there are more buyers than there are homes for sale. Homes are expensive as a result, and bidding wars are competitive. If you don’t have enough money for a down payment on a home you like, it might not be the best time to buy a home.

But if you’re financially ready to make a down payment and cover closing costs, it could still be a good time to buy. Mortgage rates have risen – but rates aren’t necessarily high enough to affect your decision.

“Homebuyers should remain calm, looking beyond the short-term rate shifts we’re seeing now, and continue to evaluate the decision to buy a home based on a number of different factors,” Heck says. “Buying a home is a major financial decision, and, while rates have increased, they have not risen to levels that make them the driving force around whether someone should buy a home right now.”

It depends on your situation – but in general, yes, this is a good time to refinance your mortgage. Refinance rates are relatively low, but they’ll probably keep inching upward this year. If you can lock in a significantly lower rate by refinancing, you may want to do so.

We should keep in mind that rates below 4% are still relatively low by historic benchmarks, and we saw rates as high as 5% as recently https://getbadcreditloan.com/payday-loans-il/wood-dale/ as . Robert Heck, vice president of mortgage at Morty

Keep in mind that refinancing will probably only be worth the effort if you plan to stay on the home for at least a few more years. You’ll pay closing costs when you refinance, so you want to stay in the home long enough that the amount you’ll save in interest exceeds the amount you pay at closing. Otherwise, you could lose money by refinancing.

How do I get the lowest refinance rate?

  • Home equity: Most lenders require you to have at least 20% equity in your home to refinance – but if you have even more equity, you could be rewarded with a lower rate. You can find ways to either increase your home’s value (like with home improvements) or make extra payments to have more equity in your house.
  • Credit score: The higher your credit score, the lower your interest rate could be. Check your credit report or use a free website like Credit Karma to see what needs improving for your score to go up.
  • Debt-to-income ratio: Your DTI ratio is the amount you pay toward debts each month, divided by your gross monthly income. Most refinance lenders want to see a DTI ratio of 36% or less, but the lower your ratio, the better your rate will be. You can either find ways to earn more money or pay down debts to decrease your ratio.

Improving in these three categories will help you land the best refinance rate, which could lead to a great time to refinance your mortgage.

Mortgage type Average rate today
Mortgage type Average rate today

Leave a Reply

Your email address will not be published. Required fields are marked *

Close
Categories