The month of May has seen the lowest mortgage rates in years, and rates have been consistently low for the past few months. For home buyers, this provides an opportunity to lock into a 30-year mortgage with buyer friendly rates.
For many homeowners currently paying a mortgage, this could mean cutting down the size of monthly payments.
It isn’t uncommon for some homeowners to have mortgages with a much higher rate than current levels. Some mortgages may even have rates of six or seven percent. However, those who still have a mortgage at that rate should consider a refinance.
At current levels, some homeowners could possibly cut their mortgage rate in half.
According to Freddie Mac, current 30-year mortgage rates are 3.58%, a huge drop from six or seven percent. Refinancing to a 15-year mortgage could save current homeowners even more with current rates at 2.80%.
Some homeowners have avoided refinancing because they are just too busy with life to bother, or they are afraid that it might cost too much to refinance.
But there are ways to lower the cost of a refinance. By following these tips, the cost of your refinance could be low enough that you can save you a lot of money moving forward.
Shop Around For Lenders
When refinancing, you should always check with other lenders to make sure you are getting the lowest rates possible. Be sure to get quotes from multiple lenders before deciding on where to refinance.
Also, consider how much the refinance might cost with a specific lender. You’ll want to pick the refinance that is the best deal for you, and that may very well not be your current lender.
Click here to get multiple quotes for your refinance. If you haven’t been happy with your mortgage provider, or you feel you could get a better deal somewhere else, then go for it and look for others that can save you money.
Lenders will give you an offer on a refinance, but it doesn’t mean that you have to settle with what they offer. Just like when you are buying a car and you negotiate the price to get a lower one, the same can happen when refinancing your mortgage. There will be some fees that are non-negotiable, but there are other fees that can be changed.
Keep The Same Title Insurance Company
It can cost nearly $1,000 or more for a title search and title insurance. Ask the company carrying the title insurance policy you have now to reissue the policy for a new loan.
This can help keep your refinance costs low. The fee will cover the cost of searching the property’s records to make sure you are the owner and to check if anyone has put a lien against your home.
Ask For A No Closing Cost Refinance
When applying for a refinance, you can ask a lender for a no closing cost refinance. To do this, the lender might be able to charge you a slightly higher mortgage rate to cover your closing costs. But your new mortgage rate could still be much lower than the current rate on your mortgage.
Other lenders might roll those closing costs into your loan, and they become part of your principal that you’ll be cover in your monthly payments.
Double Check With Your Current Lender
Before you commit to another lender, ask what your current lender is offering for mortgage rates on refinancing. Competition is tough out there with such low mortgage rates, so they want to keep the business they have.
Even though you currently have a mortgage out with this lender, you shouldn’t feel tied to them with your refinance. Be sure to pick the refinance option that works best for your budget.
Work On Your Credit
One of the best ways to save on your refinance is by raising your credit score. The higher your credit score is, the lower the mortgage rates you’ll be offered on a refinance.
Since homeowners looking to refinance have already been paying their mortgage, there’s a chance that their credit score has increased over the years.
Many homeowners can still drop their mortgage rate even if their credit score isn’t incredibly high. Lower scores will still likely lead to lower rates today.
Any homeowners with lower credit scores shouldn’t think that they can’t refinance. Still consider checking your refinance eligibility and seeing what rates are available.
Check Current Rates
While there are many reasons to refinance on a mortgage, the best reason is because rates are near historic lows.
Finding out the rates that are available to you are a great first step in deciding if now is the right time to refinance.