Should you refinance your mortgage?

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If you’re a homeowner considering a mortgage refinance, you may feel like your best opportunity has passed. But luckily, the window hasn’t closed yet. While interest rates are rising, the current mortgage market remains relatively favorable for homeowners, and while it’s unclear exactly how long these conditions will last, it’s still possible to begin the renewal process. Fund now and get the benefits.

Refinancing your mortgage can not only save you thousands of dollars in interest over time, but it can also reduce your current monthly payment. So, if you’re worried you’ve missed the refinance boat, here are three reasons it’s not too late to take advantage of mortgage refinancing.

1. Interest rates are starting to rise

A 30-year Treasury note is often a measure of a 30-year fixed mortgage rate, and when those bond yields start to fall At the start of the coronavirus pandemic, mortgage rates plummeted along with them.

Those rates start inching up again in early 2021 and throughout the spring before dropping a bit through the summer. But they did slowly climb back up since then. Based on Freddie Mac, the average interest rate on a 30-year fixed-rate mortgage was 3.11% at the end of 2021.

While this is significantly higher than the 2.65% we saw at the end of 2020 – the lowest level in almost 50 years – by historical standards, it is still relatively low. So if you’re currently paying more than your mortgage rate is currently paying, now’s the time to see if you can lock in a lower interest rate with a refinance.

And if you’re already deeply involved in your existing 30-year mortgage, it might also be a good time to use refinancing to shorten your mortgage. Interest rates on 15-year mortgages are also historically low, so you can take advantage of these lower rates to cut a few years off your current mortgage and save thousands. la profit over time.

Click here to compare offers from refinance lenders at LendingTree, an online lending marketplace.

In addition to standard fixed-rate mortgages — which lock you into one interest rate for the entire life of the mortgage — another option is an adjustable-rate mortgage, or ARM. These mortgages typically start with a key interest rate for the first three to seven years, then adjust annually thereafter for the remainder of the mortgage. The new interest rate may be higher or lower each year, depending on the prevailing interest rates at the time.

cash and computer mortgage refinancing

Typically, adjustable-rate mortgages offer lower interest rates for the first few years when compared to a standard 30-year fixed-rate mortgage. However, in a current market oddity, interest rates on fixed-rate mortgages and ARMs are currently very similar. That’s because lenders eventually expect overall interest rates to rise again and don’t want people getting an ARM now and then refinancing to another lender.

As a result, in some cases, interest rates on ARM can be practically identical for fixed-rate mortgages. What that means is that this is your chance to get interest locked in for the next 15 or 30 years at a rate that closely resembles the one you would normally only be able to secure for 5 or 7 years.

And if you already have an adjustable-rate mortgage, you have the opportunity to avoid worrying about future adjustments by locking in a low fixed rate now with a refinance. This could be ideal for those who initially planned to stay in their home only for a short time but are now considering expanding their ownership for a longer period of time.

Check your rates now at LendingTree and see offers from many lenders.

3. The need for refinancing has decreased

Amid record low interest rates in 2020, so many people want to refinance, it can sometimes be difficult to close a new mortgage, leading to delayed reports.

But now, though New home inventory remains tight In many parts of the country, the pool of people wanting to refinance has shrunk. Follow The Mortgage Bankers Association’s most recent weekly survey, refinance applications were down 2.7% on a seasonally adjusted basis from the previous two weeks and down 40% from the same time last year.

That means if you are looking to refinance you will have a better chance of completing the transaction on time, as the system is not as congested as before and you can still take advantage of the low interest rates of the day. price today.

But you shouldn’t wait too long. Lawrence Yun, chief economist at the National Association of Realtors, recently told CNN Business that he expects 30-year fixed mortgage rates to rise to 3.7% by the end of 2022. That makes it important that you lock in lower rates today while you still can. .

Save money and get cash from your home with refinancing offers from LendingTree partners.

There are many ways to get started with a mortgage refinance, but one of the easiest is through an online marketplace, which allows you to get refinance offers from multiple lenders at once while only having to deposit your information and request once.

The online marketplace allows you to compare options without having to contact each bank, credit union, and other lending institution at a time. Getting started is a relatively quick process, which is very convenient because while refinancing conditions are still favorable today, they can and are likely to change in the future.

While it’s impossible to predict exactly how quickly interest rates will start to rise again, one thing is for sure they won’t stay at these low levels forever. So, if you’re worried that you’ve missed your chance to refinance your home, the good news is it’s not too late. But you’ll want to start discovering if mortgage refinancing is right for you sooner rather than later.

Learn more about refinancing at LendingTree and get offers from a variety of lenders.

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