What does the current economic climate have to do with low interest rates right now? Well, our very sluggish economy needs stimulation to get people spending money in order to let the economic wheels of capitalism do their thing. With the lowest interest rates in over 40 years, now is the perfect time to consider a low mortgage rate refinance on your house. In addition to helping your individual financial circumstances by lowering your monthly mortgage, you will also be helping stimulate the economy with your transaction.
Start the process by comparing available interest online to see what is currently available. Online resources make this side-by-side comparison shopping super easy and convenient. They also offer excellent tools to help you make your plans, such as mortgage calculators that allow you to change the terms of the loan such as interest rates, length of loan, etc. Finally, online resources can help educate you to speak the lingo of the mortgage industry so that you will understand what you are getting yourself into.
Nailing down your goals is important too. Are you looking for the lowest monthly mortgage payment? Or are you wanting to retire your debt as quickly as possible? Can you assume a 15 year vs. a 30 year term probably for a lower interest rate, which will ultimately save you thousands in interest? Do you wish to purchase points up front?
It’s also prudent to get your financial house in order. Do you have any idea what your credit history is? A good credit score is crucial to get the lowest rates from any lender. Lenders will want to know whether lending to you is a good risk, especially in today’s climate where American’s have had to pick up the tab for risky loans in the past. Banks will want to know your wages, your debt-to-income ratio, and more.
We have enjoyed low interest rates for quite some time, however, banks are very very cautious about lending to people. If the value of your home has depreciated because of depressed housing markets, you may owe too much on your home, and a bank will not lend to you. However, if you have a lot of equity built up in your house, you probably won’t have a problem refinancing your mortgage at a lower rate.
Do your homework to see if a low mortgage rate refinance works for you. It’s advisable to talk to a mortgage adviser to see if pursuing this avenue is a good idea in your particular scenario. Start by using available online resources to begin the information gathering process.
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