It’s no secret that rates are low, and it seems they just keep getting lower. In August, the nation’s average interest rate for a home loan dropped to a mere 2.88%. Ask your grandparents, or even your neighbors, how insane that low of a rate is. Really, if you’ve purchased a house within the last few years you’re probably shocked as well. While it may seem unbelievable for rates to drop lower than those that we are seeing now, it’s possible… After all, it is 2020. 

Talk of the benefits of refinancing your mortgage aren’t going anywhere soon. But if we were you, we wouldn’t take the chance of waiting for rates to drop further… If you aren’t looking to purchase a new home in the near future, a refinance might be just what you need. Refinancing can reduce your monthly mortgage payment as well as your total interest costs. Even if your home loan is as recent as 6 months, it still may be worth looking into. 

Here are some major clues that it might be time to refinance…

First and foremost, your current rate is over 4%. If your current rate is 4% or higher, it may be a phenomenal time to take advantage of a refinance. You are almost guaranteed to save money by doing so. Refinancing for a lower rate can make a lot of sense, especially if you’ve been working on your credit score. Your interest rate is determined through various factors and the better your credit score the better chance you have of securing a significantly lower interest rate. 

Secondly, you plan to own your home for at least a few more years. With a mortgage transaction comes closing costs. It takes a period of time to break even and begin the actual savings of a refinance. If you plan to stay in your home for awhile, you can truly save money in the long run… But if you plan to move soon, maybe steer clear of a refinance and reevaluate your decision to wait on purchasing; beginning the house hunt now might be a better plan of action.

There are many other scenarios where a refinance may be especially beneficial. If you have questions about determining if a refinance is right for you, connect with a Cambria Mortgage professional: www.CambriaMortgage.com / 952-942-0110. Nothing is certain, especially in 2020, and locking in a low rate now can benefit you for years to come. Don’t wait, get started today!

Sources:

Davis, S. (2020, July 20). When To Refinance: 3 Steps to Deciding Whether to Refinance or Not. Retrieved August 26, 2020, from https://www.moneyunder30.com/what-to-consider-before-refinance-mortgage

N. (n.d.). Mortgage Refinance Calculator: Should I Refinance? Retrieved August 26, 2020, from https://www.nerdwallet.com/mortgages/refinance-calculator/calculate-refinance-savings

Treece, K. (2020, August 12). Mortgage Refinance Calculator: Should I Refinance My Home? Retrieved August 26, 2020, from https://www.forbes.com/advisor/mortgages/mortgage-refinance-calculator/