If you’ve even vaguely considered a mortgage refinance at anytime, you’re probably aware that interest rates are like a rollercoaster ride that never ends; there are big dips, steep climbs, minor drops, and varying speeds along the way.
Why? The short answer: rates vary depending on a variety of economic factors, including the rise and fall of the bond markets, and this can create volatility. The even shorter answer: they change frequently with the changing times.
Right now, rates are quite low, but the state of our economy means they could rise in the near future. This means that now is a particularly good time to refinance, but there are things you should know in order to make the most of it.
Here are three of them:
1) Submit your application ASAP: Simply put, you want to lock in a good rate. If you find one, and then take your time submitting all of your documentation, you risk losing it. Once you’ve found a mortgage broker and rate you’re happy with, get your paperwork to him or her right away (your broker will tell you everything you need to submit).
2) Know your rate options: The good news is that once you’ve locked in a rate, you’re protected, even if rates rise immediately thereafter. But what if the opposite happens—a lower rate shortly after you lock one? What many people don’t know, but should, is that lenders often have renegotiation policies, which vary based on the specific lender. You can factor this into your search prior to securing a rate, especially if this option is particularly important to you.
3) Understand cost vs. no-cost refinancing: A common misnomer, there’s actually no such thing as truly no-cost refinancing, but there is no-out-of-pocket-cost refinancing. Oftentimes this means working the costs into the mortgage itself. It’s important to know how each option will affect you; therefore, do a bit of your own research, and have your broker explain to you, in detail, what the options mean, and more importantly, what they mean to your loan.
If you do decide that now is the best time for you to refinance, you have a very good chance to get a great rate before it’s too late. Just be informed, and work with an experienced broker who can help you throughout the process.
If you’re buying or selling a home in the Boston area and are in need of a mortgage or refinance, or have any mortgage-related questions, contact me at any time for advice or help.