Is Now A Good Time To Refinance?

Have you been considering refinancing and are unsure of whether it is a good idea? One unexpected benefit of the COVID-19 pandemic has been that the interest rates for mortgages have plummeted to record lows. While this bodes poorly for the overall economy, it can signal a great time to refinance for people able to qualify.

A lower rate can potentially save you hundreds of dollars a month. Currently, rates are hovering at or just below 3% for a 30-year mortgage. Even lower for 15-year mortgages. The typical homeowner who wants to refinance generally needs to lower their rate by 1 to 1.5% for the refinance to make sense. Everyone’s situation is different so if you are close to that rate difference it could be a good idea to look into a refinance.

With such low rates, lenders have been crushed with demand. Expect delays and backlogs to extend the process to longer than you might like, but be patient. If you keep up with the document requests and loan requirements you will eventually cross the finish line.

Even with lower rates nowadays lenders are becoming more stringent on their borrowers due to the overall economic uncertainty. Loan underwriters are requesting more documentation and proof of income, assets, and expenses. Make sure to have all your ducks in a row and be ready to provide and re-provide documentation as requested. This is especially true for self-employed borrowers who are having to document even further their business as well as their personal income.

Remember to consider whether you want a straight refinance of your or a cash-out refinance. If you choose to go with pulling out some of the equity from your home there will be a higher rate. Though, it is a great way to finance a repair or project you have been putting off.

If you are considering a loan refinance and need a reference don’t hesitate to reach out. I can provide you with multiple references for loan officers ready to help you. It never hurts to ask if a refinance is right for you and to get a quote.