Mortgage rates have been pushed to historic new lows during the past year, so it only makes sense in a lot of cases to refinance home loans to see if you can get a better deal. However, the process can be very confusing!
Before diving in, it’s always a good idea to learn more about the process so that when you choose to refinance home rates yourself, you’ll know when it’s a good idea and when it isn’t.
A good rule of thumb is that you should consider refinancing your mortgage during times when interest rates sink below the level they were at when you first signed your original loan. You should also consider whether or not refinancing will lower your interest rate by at least half a point, and also whether you plan to stay in your home for a few years.
If any of the following reasons apply to you, then it might be time to consider refinancing:
Mortgage rates have already started to edge up again over the past few months. Experts say they expect rates will continue to rise as the economy starts to return to normal. In other words, now is probably a great time to act.
Keep in mind that mortgage rates probably won’t soar, and that’s because the Federal Reserve has vowed to keep the rate near-zero until further notice. The Federal Reserve doesn’t actually control mortgage rates, but they do influence the mortgage market as a whole.
If you play your cards right and meet certain requirements, you can expect that mortgage rates will end up in the range of 3.5 percent by the end of this current year. That means you should act now instead of waiting if you’re currently in the market to do so.