Mortgage rates at the moment are hovering near record lows. Some 30-year fixed rate home loans are as little as 3.25%, lower than even the long-term rates of 3.31% seen toward the end of 2012. But these low mortgage rates aren’t just good news for Americans looking to buy a home in the next year.
This is great news for anyone who’s in the market for home refinancing options, too. Why spend more than you need to? Take advantage of the current refinance rates to lock in a new plan you can keep for years to come.
- Crunch some numbers
Getting a new refinance rate isn’t as easy as calling up your local mortgage lenders and asking them for it. You want to take into consideration your current rate, how much you’ve already paid on your mortgage, and how long you want your refinance term to last. Another long rate isn’t necessarily in your best interests; shorter, low interest home loans can actually help you save money in the long run.
- Improve your credit score or equity
Perhaps you were a little younger and more naive when you locked in your initial interest rates on home loans. Maybe you didn’t have the best credit score or the most equitable assets to your name. Now that you’re older and wiser, you can work to improve those qualities to make yourself more attractive to lenders. Sticking with your current employer is also important, as any changes to your income could affect your refinance rates or delay the mortgage process altogether.
- Shop around
With the right plan, you could actually have lenders fighting over you. Compare different companies to see what they can offer — and be sure to let them know the best rates you’ve found so far to see if they can compete. Just like you would with a regular mortgage, lock in a rate as soon as you’re comfortable with the numbers.
There’s never been a better time for current homeowners to take advantage of low mortgage rates, even if you don’t plan on moving for a long, long time. A little bit of work to alter your mortgage with low refinance rates could save you bundles of cash over time.