This global pandemic may have shaken almost every aspect that shapes every U.S. household; however, there will always be one thing to remain as a silver lining: the mortgage. Since March, the rates of the mortgage have tumbled. This pandemic has massively challenged economic rates and stability. People began suffering, but the good thing is mortgage rates are still in its good condition. This now opens a lot of opportunities for the purpose of refinancing.
If you have already done the refinancing of your home years before, you may still doubt whether you are going to have another. But worry no more since you can always refinance your home, not just once. The only question that remains would be, does this makes sense or not?
Given that, below are some things you need to look into before considering another mortgage refinance. These things will help you get better understanding and tactics on what, how, and when to do refinancing of mortgage.
What Are The Rates Of Today’s Mortgage?
The rates of mortgage recently dropped below 3% due to this global pandemic. According to Freddie Mac, there was a recorded drop to 2.91% in a 30-year fixed mortgage. This is lower compared to the prior week, wherein 2.99% was the rate. On the other hand, a 15-year old fixed mortgage rate also dropped to 2.46% from 2.54% in the same period.
How Many Times Can A Mortgage Be Refinanced?
If you already did a refinance in the past for your home, chances are there are times that you’ll wonder how many times if you can do it again.
Well, the answer is there’s no cap. Mortgage refinancing can be completed unless you have applied for a streamline refinance on Veteran Affairs (VA) or Federal Housing Administration (FHA) loan. Here, you are given 210 days at least to pass from the closing date and six months, at least for the qualification of a new VA or FHA loan since the first due payment.
Do You Need To Refinance Your Mortgage Multiple Times?
According to experts, if the mortgage rate of your house is already more than one percent on the current rates, doing refinance definitely makes sense. However, the benefit of doing the process boils down to the time to recoup the closing costs and when to sell it.
Refinancing closing costs can usually run between 3 and 6 percent of the new loan amount you have. Let us take this as an example, if you have $300,000 for a 30-year fixed mortgage, with 4.4% interest and payment of $1,688 every month in interest and principal. If you refinance this 30-year old loan, there will be a decrease to $1,303, which can help you save $385 every month given that there are a closing cost and interest rate, both 3%. This can enable you to save more for the next three years. Aside from that, in every refinance you make, the home loan’s clock will be reset.
Given this instance, you have the remaining 20 years for a 30-year old mortgage, and you will have another 30-year loan for a new refinance, it can take you another 30 years to pay. This is if you’re not paying on a weekly schedule. Given that, prepayment penalties are possible such as a fine charged by the lender on you if you have paid the mortgage off before it’s up. The refinance of your mortgage might trigger this. So, this serves as a factor for you to assess whether you will refinance your mortgage.
Also, with this global pandemic and continuously drowning economic status, it is important to secure your job before committing into a mortgage refinance. If your job is currently at stake and will only make it hard for you to support mortgage refinance, doing this can be a huge headache.
Considering your credit score is also a need. Generally, 750 or more credit scores are the best refi rates for a borrower. These credit scores help a borrower to find more potential lenders that they can rely on to consider that they have a mortgage refinance to deal with.
Best Refi Rates To Shop
To save a hundred or thousand dollars for a new loan, comparing offered refi loans from various lenders can be a big help. It opens better opportunities for loans to help you pay and settle the mortgage refinance. Here, almost $3,000 is the potential savings for a mortgage by getting five quotes. Also, according to Freddie Mac’s research, only three out of four borrowers, or 77%, can apply for a mortgage to one lender. This was also agreed by the study conducted (CFPB) or the Consumer Financial Protection Bureau.
If you still need help in hunting the best rates for mortgage and loan terms, turning to the professionals of this field is the best thing to do. These tools help in finding prequalified rates offered by multiple lenders in less than three minutes. Also, these ensure high-quality services and responses to whatever mortgage refinance concerns you have.
Now, go and get your mortgage to refinance settled for a better living. This pandemic will not be a hindrance to making the best out of this life concern.
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