Here’s the thing: The Mortgage Bankers Association is forecasting USD 1.23 trillion of refinancing originations this year, and that translates to a 37 percent increase from last year. The primary reason? The plunge in government bond yields as Treasuries have fallen to record lows as investors seek a haven from the stock market blow brought about by the covid-19 pandemic.
For those who are new to the term, mortgage refinancing is a way of paying off your existing loan and replacing it with a new one. It has several end goals: (1) to obtain a lower interest rate; (2) to make the mortgage term shorter; (3) to convert from adjustable-rate mortgage to fixed-rate mortgage or vice versa.
Now, you probably have these questions: Is it the right time to jump on the bandwagon? Is it the right time to refinance your Austin home mortgage?
Mortgage refinance, Austin, TX is one of the most crucial decisions you can ever make in life. That is because it can affect your life for a long time – we are talking about a decade or more here.
So, what should you consider when refinancing your mortgage? Take into account the following:
If you can slash one-half to three-quarter of a percentage point off your current mortgage rate by refinancing your mortgage, then it might be worth considering. However, you have to make sure that the cumulative amount you save from monthly payments is enough to offset the costs of refinancing.
Having credit that is good enough to qualify for a mortgage refinance, Austin, TX, is another consideration. The truth is, most lenders require a minimum credit score of 620 to approve refinancing applications. Therefore, review how good your credit rating is. If it isn’t good enough, there are ways to improve it, such as paying off your bills on time and keeping your credit card balances low.
Duration of stay
How long do you plan to stay in your home? If you are not planning to stay long term, then it might not be a wise decision to consider refinancing. You need to live in the home long term because the goal is to recoup the cost of refinancing. Else, it will defeat the purpose of refinancing itself.
Are you interested in a mortgage refinance, Austin, TX? Talk to an expert at HomePlus Mortgage today. Contact us at 512-949-3385.