This BLOG On Homeowners Who Should Refinance Now To Save Money Was UPDATED On January 20th, 2019
Par mortgage rates are still under 5.0% for prime borrowers.
- Mortgage rates are at a 23 month high
- Prime borrowers are consumers with credit scores of at least 740 FICO and who have 20% down payment for a home purchase
- Still, borrowers who are not prime borrowers can benefit from refinancing their current home loans for better mortgage rates
- They can save tens of thousands over the course of their mortgage loan
- FHA, VA, and USDA loan mortgage rates also follow Fannie Mae and Freddie Mac’s mortgage rates
- If conventional rates go up, so do mortgage rates on government loans
- Government loans are loans that are FHA, VA, and USDA
- There is a lot of talk of mortgage rates rising in the second half of 2019
However, if you are paying attention to mortgage rates and the volatility of mortgage rates in the past several weeks, you will see that all indicators seem like mortgage rates will be going up sooner than later.
Extreme Volatility Of Mortgage Rates
Mortgage rates have been extremely volatile:
- Mortgage rates have skyrocketed in the early part of the week and dropped in the latter part of the week
- Nobody can predict the future of mortgage rates but most agree that mortgage rates cannot remain this low forever
- Even with last week’s sudden spike in mortgage rates, mortgage rates are still at a 22 month high
- Many homeowners who have been sitting on the sidelines waiting for mortgage rates to drop to prior to June 2013 levels may be missing out the chance of refinancing their current home loans
- Back in June 2013, tens of thousands of homeowners who were about to close on their refinance mortgage loans could not close due to the sudden rise in mortgage rates
Since they did not lock their mortgage rates, they lost the chance of refinancing their home loans since mortgage rates did not go through a correction after the sharp spike.
Freddie Mac 30 Year Mortgage Rates
Freddie Mac 30 year fixed mortgage rates are at 4.75% for prime borrowers which is a 0.78% basis point improvement from January 2019 mortgage rates.
- Freddie Mac’s 15 year fixed mortgage rates are still at recent lows with a 4.75% average for prime conventional borrowers
Refinancing at today’s rates may save homeowners with higher mortgage rates save tons of interest over the term of their mortgage loan.
The Types Of Homeowners Who Should Refinance Now
Homeowners who have bought their homes prior to July 2017 should examine what interest rates they have and see what today’s rates are and see if they can benefit from a refinance mortgage.
- Also, homeowners who have an FHA insured mortgage loan should examine if they qualify for a conventional loan
- They should see if they qualify for a conventional loan
- Should explore the idea of refinancing their FHA loan to a conventional loan
This is either to reduce their monthly mortgage insurance or eliminate their mortgage insurance altogether.
Mortgage Homeowners Who Should Refinance Now With Cash-Out Mortgage
Real estate values have been going up since 2010 in most parts of the country, especially in California.
- Homeowners who purchased their homes several years ago should see what their property is worth by checking similar properties that have sold in their area
- Many California homeowners do not realize that their properties have gone up double digits
- Same with homeowners in Florida and Illinois
- Many homebuyers in certain states got lucky
- Or priced their home purchases at the right time right after the real estate collapse of 2008
- They purchased their homes at the bottom of the housing market
- Homeowners with substantial equity due to the appreciation of their home can qualify for a cash-out refinance mortgage
- They can take cash out from their refinance mortgage and pay off other debts such as high-interest credit card balances, auto loans, installment loans, or use it for home improvements, or other investment
You are allowed up to an 80% loan to value on conventional loan cash-out refinance. FHA allows up to 85% on a cash-out FHA loan refinance mortgage. VA allows up to 90% on a cash-out refinance mortgage.