Mortgage rates today make refinancing appealing: 4 things to consider
While you’ve been preoccupied with a plague and politics, mortgage rates have been falling and refinances have been booming. And the boom has a lot of room to expand.
Almost 18 million homeowners could cut their mortgage’s interest rate by 0.75% or more, according to Black Knight, a mortgage analytics company. That transcends the 3 million homeowners who refinanced in the first half of 2020.
Mortgage rates dipped to record low territory this summer and fall. The average interest rate on the 30-year fixed-rate mortgage has been under 3% since early September, according to NerdWallet’s daily rate survey.
Not sure if now is the time to refinance? Quiet your confusion by asking yourself the following four questions.
What do you hope to accomplish by refinancing? The answer to that question is your goal. Identifying your goal is the first step because it points you toward the right refinance loan.
Here are three common refinancing goals:
• None To reduce the monthly payment. For this simple refinance, apply for a loan of the same term — another 30-year loan, if that’s what you have.
• None To pay less interest. When you refinance a 30-year mortgage into a loan with shorter term, your monthly payments are likely to be higher, but you’ll pay less interest over the life of the loan.
• None To get cash. A cash-out refinance allows you to borrow more than you currently owe and take the difference in cash. It’s a common way to pay for home renovations ...
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