Nearly 18 million homeowners (or more) are potentially missing out on mortgage refinance savings, according to a recent report from Black Knight, a data analytics firm. That saving comes in the form of interest savings, payment savings, or debt consolidation.
Mortgage rates have stayed near historic lows for the past few months, and refinance rates have bloomed as a result, thus, making now a great time to refinance your existing home loan. If you’re wondering if that is you, read on!
Reasons to refinance:
- You can cut your interest rate: If you can slash your current interest rates by at least 0.75% by refinancing, then you should consider a refinance. (For example, if your old interest rate was 4.75%, you would want to qualify for a new loan rate of at least 4.0%.) Right now, some homeowners are in the 2’s.
- You have at least 20% home equity: You’ve paid down your home loan to 80% of your home’s value or less. Even more, than paying down, the value of your home has skyrocketed!
- You have a good credit score: You have or a FICO credit score of 700 or above. Don’t let that number scare you. There are solutions for all credit scores. Plus, most homeowners are truly unaware of their current credit score.
Time is of the Essence!
That said, if you’re thinking of taking advantage of real estate’s lower rates, it’s best to act now. In response to the wave of refinances that have taken place over the last few months, Fannie Mae and Freddie Mac have decided to charge a new 0.5% surcharge on mortgages over $125,000 that become part of their portfolio.
This fee was originally intended to have a September 1st start date, but mortgage rates soared in response to an outcry (market pushback from you, the homeowner) following the announcement. As a result, the fee was delayed until December 1, 2020.
Look, in the end, 0.50% is a significant increase potentially for no good reason. However, your goal is not simply about rate. Your goal is a financial goal. What are you achieving? What would a new mortgage look like for cash-flow? For debt reduction? Now is a good time for a financial check-up. Each day you wait, you continue to pay more than you should. Take action and contact us today!