Real Estate: Refinancing Rates on the Rise in 2017
by Amy Lignor
The term ‘meteoric rise’ usually applies to something fun. Think: A Hollywood actor who has been ‘discovered.’) Unfortunately, when it comes to this article, ‘meteoric rise’ is something that will not bring a smile to one’s face. To put it simply, if you wish to refinance your home, you need to do it ASAP. If choosing to wait too much longer, homeowners across the country are going to miss out on saving huge amounts of money.
Although mortgage rates are still near historic lows, no one could possibly believe that they will stay that way. And with the politics being what it is at this time (and showing no signs of changing in a positive way whatsoever) real estate will be changing and so will banking. Trump and the Federal Reserve are setting up the country (according to experts in both the banking and real estate industries) for higher interest rates. With millions of Americans eligible to refinance in 2017, but haven’t yet, it is highly important to note that these interest rates will experience a meteoric rise – rising so fast that if you don’t refinance now, you may not have another time to do so.
Mortgage rates are tied to the economy, and economic uncertainty is what you’re looking at from now on. From weak job reports to current military action causing concern, economists are being very realistic when saying that they have no idea what’s going to happen next. Uncertainty, as the past has proven to everyone, throws mortgage rates out of control, causing them to suddenly skyrocket to the highest levels ever seen. The low refinance rates that smart homeowners have taken advantage of thus far have provided them with reduced monthly mortgage payments.
So, how do you go about refinancing in 2017, so you can take advantage of the low interest rates ASAP? Here are the steps to take:
First of all, move fast. Though rates won’t rise immediately, that steady upward movement they will have is not going to change direction and will hit that ‘meteoric rise’ moment. According to Consumer Reports, the historically low rates that we have experienced are not going to go any lower, which means now is the time to refinance.
Second, you need to make sure that your credit score is in good shape. You must remember, even though rates are low does not mean you quality for them. Seeing as that your credit score is a large part of getting these rates, check your report for any errors that have been made, then make sure to pay your bills on time, and use those credit cards sparingly. Make a budget and stick to it in order to reap the benefits of refinancing.
Thirdly, think about refinancing into an adjustable-rate mortgage. In an unstable environment where the interest rates will rise, ARM’s make sense since these loans will come with lower initial rates than fixed mortgages. They’re especially the ones to choose if you already know you plan on staying in your home no longer than the fixed term of the loan. The other side of this comes when refinancing out of an ARM. If you’re concerned about the interest rate rising on your adjustable-rate mortgage, refinancing to a fixed-rate product can allow you to lock in a new rate to make your monthly payments more predictable. This is better to use when already having the knowledge that your home is going to be the one that lasts a lifetime.
In addition, refinancing to a shorter term fixed-rate loan can save you cash. Not only is the interest rate lower than with a thirty-year fixed-rate loan, but the shorter term also means you’ll save more cash over the life of the loan by paying less interest.
In the end, the facts ring true: experts ranging from economists to financial advisors to real estate agents state that this historically low interest rate level will rise (meteorically) one day soon. Therefore, the time to refinance is now in order to save your money before it disappears completely.
Source: Baret News