Why should you refinance in 2021 – things to know about all things mortgage’s this year!

Why should you refinance in 2021 – things to know about all things mortgage’s this year!

That question comes to mind for homeowners whenever news of another record low turn in interest rates hits the news. Just take a look at 2020…

“All eyes have been on mortgage rates this year, especially the 30-year fixed-rate, which has dropped more than 1 percentage point over the last 12 months,” says Sam Khater, chief economist at Freddie Mac, the mortgage giant that has been tracking rates for nearly 50 years.

MND’s Daily Rate Survey | 52 Week Product | Today | Yesterday | Change | Low | High 30 Yr FRM | 2.78% | 2.76% | +0.02 | 2.76% | 4.15% 15 Yr FRM | 2.32% | 2.31% | +0.01 | 2.31% | 3.90% FHA 30 Year Fixed | 2.25% | 2.25% | — | 2.25% | 4.00% Jumbo 30 Year Fixed | 3.12% | 3.11% | +0.01 | 3.11% | 4.75% 5/1 Yr ARM | 2.34% | 2.32% | +0.02 | 2.28% | 4.38% Updated: 1/5/21 1:17 PM

As you can see in the chart above the market is absolutely on fire with the lowest rates in the past 50 years. Now is certainly the time to consider your options.

Why You Might Consider Refinancing Your Home Loan

There are several reasons why refinancing might be right for you. Usually, people refinance their home for one or more of the following reasons:

Lower your monthly mortgage payment —You can lower your monthly mortgage payment by taking out a new loan at a lower interest rate, or by taking out a longer-term loan — i.e., refinancing the current loan with 20 years left to a new 30-year loan.

Lower your overall costs — Another reason is to lower their borrowing costs by taking advantage of the lower interest rate. This is why more people are refinancing their home loans when interest rates are low.

Raise cash — Refinancing can also be used to unlock your home equity and gain access to cash. Money raised from refinancing could be used for different purposes; for instance, for home renovation, to pay off high-interest debts such as credit card debts, student loans, to pay for major expenses, or investment purposes.

Shorten your mortgage term —It may be worthwhile to convert your longer-term mortgage to a 15-year loan. This will help you pay off your home loan much faster and save you tens of thousands of dollars in interest payments.

Eliminate Private Mortgage Insurance (PMI) — If your equity increased above 20% due to the rise in your home value, refinancing could be an option to get rid of your PMI if you can’t persuade your lender to drop the mortgage insurance. Getting rid of your PMI could save you hundreds every month.

How long does refinancing your home take? In most cases we are closing refinances in less than 3 weeks. Having all of the standard documents ready at time of application is key. They include…

Mortgage statement

Tax and insurance bill

Most recent two paystubs

Two year’s W2’s

Most recent two months bank statements (All pages)

Legible copy of your photo ID

How expensive is it to refinance? Depending on your loan size the low rates allow us to use interest rate credit (above par pricing) to absorb most costs. We are also receiving property inspection waivers on most of our conventional refinances which saves both processing time and cost of the transaction.

The market is great. Now is certainly the time to review your options. We would love to help! You can apply at www.minthl.com. We would love to review the current market with you!

Bob Kaestner, Mortgage Originator Bob@MintHL.com 443-956-5623

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