Why Now Might Be the Best Time to Refinance Your Mortgage
The process of getting a new mortgage to replace your original mortgage is known as refinancing. Refinancing is a common way to get a better interest rate and loan terms.
However, since housing prices and loan rates are always rising and falling, it isn’t always clear when the best time to refinance is. The economic climate isn’t always predictable, so how do you know what to do? According to the home buying experts, the best time to refinance your mortgage might actually be right now.
Why Refinance Your Mortgage?
If you’re wondering why now is the best time to refinance your mortgage, we should first talk about why you might refinance in the first place. If you’re struggling to afford your mortgage payments or you’ve noticed other offers available, it might just be the right choice for you.
When you refinance your mortgage, the original home loan is paid off by the second loan. If you have a good credit history, you might be surprised by what an improvement this can be. In many cases, it will shorten the life of your home and reduce what you pay.
That being said, you have to be careful when you refinance your mortgage. If you don’t know what to look for or you don’t have the best credit, it might be worth holding off. For most people, right now is the best time to refinance your mortgage.
Why Refinance Now?
So why is now the best time to refinance your home? If you’ve kept a close eye on the economy and housing market as it changes, you might have heard that a recession is on the horizon or that the housing market isn’t ideal in many places. In reality, there are many reasons to refinance your home right now:
- Mortgage interest rates are on a decline – The first reason is simply that interest rates are dropping. In August 2019, the average rate for a 15-year fixed-rate mortgage was 3.37%, another decline. These are only expected to lower in the next few months.
- A recession might be coming – Those news articles about an impending housing crisis and recession aren’t necessarily that far off base. While there’s no way to predict the future, this is a real-life concern. Acting now to secure a lower rate while you can is a smart move.
- The savings are worth it – Any savings is generally worth it. Most people spend an average of 2% – 5% during the loan closing, but you can reclaim this money within a few short years as long as you don’t plan to move. You don’t want to miss out on the best time to refinance your mortgage.
Taking a Look at Your Home Mortgage
Unless you’re planning to sell your home soon, it’s a good idea to take a close look at your home mortgage. Is this a rate you can afford? Has your credit improved since you first applied for your mortgage? If things have changed, it might be time to consider refinancing your home mortgage.
Saving money on your mortgage is an effective way to build wealth. Because we can’t predict the future, now is the best time to refinance your home while you have the chance. While nobody wants a recession to be right around the corner, it’s always better to be safe than sorry, especially when it comes to your home.