4 Tips When Refinancing With Rising Mortgage Rates
Crown Point Mortgage Lender – Larry Penilla
As a local mortgage lender, I am always monitoring mortgage rates and determining how it may affect my clients.
Although mortgage rates in the United States are still near all-time lows, they are expected to increase in 2017. However, this doesn’t have to affect your decision when it comes to refinancing your mortgage.
Inspired by a recent article on MarketWatch, here are 5 tips to remember when you’re looking to refinance your mortgage with rates increasing.
1. Don’t delay in starting the process
Mortgage rates aren’t going to jump through the roof in 2017, but they certainly aren’t expected to remain as low as we have experienced over the past year.
Consulting a mortgage professional, such as myself, to discuss current and anticipated mortgage rates is the first step in refinancing. However, it’s going to be key to act fast and securing a rate sooner rather than later, before they get too high.
2. Keep working at your credit score
Of course, to successfully act fast by pouncing on a low rate, you are going to need a good credit score to secure it. This is when planning ahead can be extremely beneficial in the refinancing process.
By planning for rate increases, you can boost your focus on ensuring you have a good credit score so that when the time comes, you can easily and quickly secure a mortgage refinance at a favourable rate.
It’s important to keep an eye on your credit report and ensure everything is correct, don’t be late on paying bills, and do not exceed your credit limit.
3. Switch the type of rate you have
If you currently have a fixed rate mortgage, it may be beneficial to think about switching to an adjustable rate mortgage.
Refinancing to an adjustable (variable) as mortgage rates increase can mean that you get a lower original interest rate. Note that this is more favorable to people who don’t plan on staying in the same home longer than their fixed term’s loan.
If you know of the potential risks and benefits of making the switch, including potential rate rises, a variable rate mortgage can be good for your situation.
4. Plan and execute
This tip is similar to Tip #1, but that’s how important it is to be prepared.
Being ready for a potential rise is the best thing you can do for a refinance. The sooner that you can submit your application, the sooner you are going to be able to lock-in at a low rate.
As rates are expected to rise, locking in at a low rate sooner than later is recommended. If you’re not prepared when there is a rate that you want, you may have to delay and wait (or hope) for a rate drop.
As a Crown Point mortgage lender, refinancing mortgages is something that I help people with every day. Having helped hundreds of clients refinance their mortgage, I can certainly help you do the same.
If you’re thinking about a mortgage refinance, contact me today to learn more!