If you own a home, chances are high that you’ve been giving some serious consideration to refinancing lately.
Everyone knows that mortgage rates have fallen to record breaking lows, but do you know about the “adverse market refinance fee” set to take effect on Sept. 1 2020? This fee will apply to most loans sold to Fannie Mae and Freddie Mac. As an example, if you’re looking to refinance a $350k mortgage, the fee would cost you an additional $1,750.
Other reasons to refinance:
1. Build your equity
2. Improve your loan terms
3. Get a better interest rate
If you are looking to refinance, make sure you check into the following items:
- Mortgage rates are currently below 3%, which means that almost 18 million home owners can save money by refinancing.
- Closing costs, which typically account for about 2%-3% of your loan amount should be taken into account.
- Do you plan on moving? If you’re looking to sell your home in a few years, you may not save enough money with a refinance to make up for what you’ll spend in closing costs.
- Make sure your credit score is in good shape. You most likely will not be able to score that low interest rate unless your credit score is above 700+.
The bottom line is to make sure you consider all of variables which may impact your unique situation. Here are tips when choosing the best mortgage loan refinancing company
- Read lender reviews. Happy customers might write great reviews about a company, but folks who have a bad experience will DEFINITELY write a bad review.
- Shop around online. Make sure to compare reputation, rates, and options before deciding.
- Shop your rate. Once you have a rate from a company, don’t be afraid to shop it with the competition. If you don’t ask, you won’t get.
- Know your credit score. A lender will use your credit score one of the main factors in deciding your interest rate. Make sure you’re aware of your credit score and history.