November 2nd, 2020 7:38 PM by Jackie A. Graves, President
Amid the COVID-19 pandemic, current homeowners have been given a gift – record low-interest rates. In order to bolster the lagging economy, the Federal Reserve cut the interest rate to near zero (0.25%) in March 2020. Now, homeowners (even those who bought as recently as early 2020) should consider refinancing in order to maximize what they can save on interest.
Multi-lender marketplace ChangeMyRate.com can show you the latest mortgage refinance rates with the click of a button. ChangeMyRate.com updates their information daily, as rates can fluctuate. So, make sure you stop by ChangeMyRate.com to see where the numbers stand before getting started.
Getting the best refinance rate is simple for homeowners willing to do the homework; below are four things to do in order to save the most money before the end of the year.
1. Improve credit score/debt-to-income ratio
The Federal Reserve sets the interest rate, but banks charge more on top of this so they make can money. The rate a bank gives each consumer varies depending on their credit score. Those with average credit can still benefit from refinancing, but borrowers will see the most significant savings when refinancing with a strong credit score.
With ChangeMyRate.com, you can get actual prequalified rates – not estimates – within just three minutes without any effect on your credit score. Just tell ChangeMyRate.com a little about you to get started.
But keep in mind, your credit score and history can play a role in your offers.
In order to save the most money, investigate ways to improve your credit score in the short term, such as paying down debt (if you can afford to) and cleaning up errors on your credit report.
2. Shop and compare rates and lenders
This is a no-brainer. Interest rates vary between lenders, so you don't want to just pick one and hope for the best. Let ChangeMyRate.com do the heavy lifting. View a rates table that compares multiple mortgage lenders at once. You can filter by monthly payments, APR, or other fees to ensure you're getting the lowest refinance rates possible (your bank account will thank you).
But this isn’t the only reason to look at many different lenders. The most important thing to consider is that borrowers incur closing costs when refinancing, no matter how recently they bought the home. So, shopping lenders not only allows borrowers to vet the rates but also to browse what each lender is offering in terms of closing costs. The trick to saving the most money on a refinance is to get the lowest rate you can and pay the least amount in closing costs.
Those shopping for a mortgage refinance should visit ChangeMyRate.com, where you can explore mortgage refinance options and quickly compare rates and lenders in one place.
3. Use a mortgage refinance calculator
Depending on what the rates were when you bought your home, you may think your rate is low enough that you don’t have to look at refinancing. After considering closing costs, you might think, “it probably isn’t worth my time.”
This sentiment could be true, but with rates at historic lows, borrowers are unlikely to see rates lower than this again. In order to not miss out on the lowest rates, you’ll likely ever find, use an online mortgage refinance calculator to determine new monthly costs. Using the calculator allows you to incorporate closing costs into the calculation, so you’ll see your “break-even” date and get a clearer idea to determine if refinancing is the most fiscally savvy move for your family.
Aside from a mortgage refinance calculator, it's a good idea to crunch the numbers using ChangeMyRate.com's free online tools, too. Just fill out a few forms to find your savings quickly.
4. Act immediately
Analysts at the Federal Reserve predict rates will stay low through 2022, which is good news if you need a bit of time to shore up your credit and lower your debt-to-income ratio. But if you meet the prerequisites like good credit and steady employment, now may be the time to act since mortgage rates can fluctuate from week to week.
Currently, rates for a 30-year fixed-rate mortgage average around 3.04%, but just one month ago they were lower at 2.98%. To illustrate the difference this small dip can make, consider this example:
$14,000 in savings over the life of a loan is a substantial amount of money, which is why it is important to act now if you meet the requirements.
For those seriously considering refinancing, visit ChangeMyRate.com to get in touch with experienced loan officers and get your mortgage refi questions answered.
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