Finding current mortgage interest rates at a solid percentage can be quite difficult. When you begin the refinance process, it certainly helps to become more aware of what goes into your new financial strategy. It’s just like going skydiving: you want to know what material you need to wear, safety precautions to take, the height of the drop, the right way to jump out of the plane, and how to work the parachute to land safely. The more knowledge you have about a task, the better you’ll do completing it. One of the first preparations is learning about rates. Here are some tips to be aware of before getting wrapped up in your mortgage.
Search Current Mortgage Interest Rates
It’s important to look at different banks online. There are a number of sites such as Wells Fargo, Zillow, Bank Rate, etc. When it comes to doing your own research, it’s important to get the most updated information. This way, you will have less chance of putting yourself in a tight spot because you are more aware of the standard. Also, it gives you time to think of what kind of refinance you should consider such as a conventional or FHA refinance.
Why are Mortgage Calculators Useful in Finding the Best Rate?
Now, this is very important…most banks or mortgage based websites have a calculator to help you get a good look at your future financial situation. Whether you are considering a 15 year or 30 year fixed rate, you seriously need to take into account how refinancing at current mortgage interest rates will affect your overall balance. Let’s say you want to go with a 15 year fixed rate– you may anticipate paying a higher monthly mortgage. However, your interest rate will be much lower. It’s a bigger commitment in the beginning, but you could honestly save thousands of dollars by taking less time to pay it off. If you consider the longer term rate, you’ll pay less monthly but more down the line. It’s up to you to decide what way works best for your situation.
A Few Refinance Options
It depends on a few factors such as income, equity, and credit. Most lenders want homeowners to put in at least 20% of a down payment on the property before it closes. This way, a level of stability is created in the home as far as mortgage payments. Refinancing like this can be great especially if you are looking for a cash-out situation (where you can get money from the equity). You can take out more cash from the equity, but at the same time you’ll have to take on a higher interest rate. Remember, you need to replenish your equity after going through with a cash-out refinance.
With a federal streamline refinance you can get lower mortgage payments without going through all of the paperwork (income verification, W-2, appraisals, etc.). This can save a lot of money and help build value in the home. However, you will certainly take on some higher interest rates. Depending on the market, interest rates can certainly go up, so it’s always good to stay alert in a volatile situation.
You also have a federal cash-out refinance option too. By going this route, you can refinance at 3.5% with a 580 credit score. If the credit score is below 580, lenders require at least 10% equity. Just like a conventional cash-out, the amount of interest paid is dependent on how much equity you take out. Whatever you choose, make sure you figure out what the result will be with the new mortgage. Of course, you also have to take into account that you need an appraisal and the cost of some repair fees. The upside? By taking out the equity you can get a nice chunk of money to use for a second investment, paying school expenses, paying off car debt, taking a dream vacation, or setting up an emergency fund.
Keep Everything in One Place: Your Bank
Does the phrase “in-house” sound familiar? Well, this is certainly the case to get current mortgage interest rates at a better percentage. If you have a checking and savings account at a bank, you have already have an established business relationship. Before directly consulting with a representative, you may want to get some pamphlets regarding a refinance. See if their current rates match with other rates across the board. Maybe you can get a better deal; speak with a representative and see what happens.
There is a number of things to do before you decide to pick current mortgage interest rates. Diversify your choices and select a great mortgage specialist to help you in your future endeavors.