While the market for home buyers has been limited in 2021, the market for current homeowners to refinance has increased. In fact, according to Fannie Mae, mortgage refinances have increased from 56% to 58% of all mortgages in 2021. While the number of new home buyers has fallen below projections, largely due to a 14.8% price growth on homes in 2021.1 Couple that with lower fixed-rates and refinancing has become an attractive option for many homeowners.
So is it the right time for you to consider refinancing? If you are able to gain a lower interest rate and potentially a shorter term, the short answer is … yes! All situations are on a case-by-case basis, but this is a great time to explore the option if you are looking to save a little money post-pandemic. With fixed rates dipping below 3.0% across the board, it might be time to consider the option.2
According to MarketWatch, here are some questions to consider when weighing a potential refinancing3:
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How long do you plan on staying in your home?
If you do not see yourself staying in your home for 10 – 20 years, it might not be worth the cost of going through the refinancing process.
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Where does your mortgage currently stand?
If you have a low principal balance left on your loan, there may be very little if any to gain from lower interest rates. It is important to have someone do the math for you and urn the numbers to see what there is to be gained from a refinancing.
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Do you have the money and credit score to justify refinancing?
With the average cost of refinancing at around $5,000, you need to consider whether it is worth it or not for you to go through the process of refinancing your home. You also have to be conscious of your credit score, if you don’t have a very good credit score refinancing may not save you much money- if any.
If you are considering refinancing your mortgage, we encourage you to come speak with one of our experienced lenders at CES Credit Union. We can do the math for you and see if we can get you get a lower rate, term and monthly payment! Learn more about mortgages and refinancing at CES Credit Union here.
Important information to bring to the table for discussion would be:
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Your present mortgage balance, term and interest rate
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Approximate market value of the home
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Your future plans for the home, such as how long you plan to stay there, and
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Your goals for paying off the home.
All loans subject to credit qualifications. CES Credit Union NMLS# 798565. Equal Housing Opportunity. This is not a commitment to lend.
1 - https://www.foxbusiness.com/personal-finance/housing-inventory-limits-home-purchase-activity-refinances-rise
2 - https://www.foxbusiness.com/personal-finance/todays-mortgage-refinance-rates-august-25-2021
3 - https://www.marketwatch.com/story/should-i-refinance-my-mortgage-heres-how-to-decide-11610391313