Mortgage refinance is the silver lining for homeowners in 2020 (and some have already done it twice)
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If 2020 has you feeling like you can’t catch a break, you’re not alone.
But if you own a home, you might have lucked out. Global uncertainty is actually playing to the advantage of American homeowners by creating potentially a once-in-a-lifetime opportunity for mortgage refinancing.
Why Interest Rates are Strangely Low
As markets have been shaken, the Federal Reserve Board has pulled the levers at their disposal in an attempt to inject confidence into the housing market. Their moves have resulted in some of the lowest interest rates on record. Some homeowners have even reported interest rates between 2% and 3% -- affordability once considered unfathomable.
Who Is Eligible for the Best Rates?
- Having a great credit score has never been more important. The best rates are going to homeowners with a FICO of 640 and above.
- Conforming loans (under $510k in most areas of the US, up to $765k in some places) are getting the best rates
Is Now the right time to Refinance? What if I already did?
Rates have dropped meaningfully since March of this year, down by more than 0.5%. They are now at the lowest levels that have ever been recorded. Even if you refinanced earlier this year, it may still make sense for you to refinance for even more savings! This could be a once-in-a-lifetime opportunity and may not be around for long.
Lower Your Payments or Pay Off Early
The current refinancing landscape essentially presents two money-saving paths: a path to lower monthly payments, or a path to faster repayment. Those struggling due to the economic fallout from COVID-19 could keep their current 30-year mortgage term while securing a lower interest rate.
Here’s an example: If you took out a $400,000 mortgage in California just three years ago, and currently have at least a 5% interest rate (which is already a very low rate), you could probably save about $357/month by refinancing today! Whether your house is more or less expensive, or your current rate is better or worse, you can’t argue with the fact that the savings are significant.
Alternatively, those looking to capitalize on low interest rates could refinance into a shorter 15- or 20-year mortgage and save thousands in interest while shaving years off of their repayment.
Where to look for lower rates:
Amerisave offers industry-leading rates and an intuitive, online user interface.
View a variety of loan options with no obligations, no commitments and most importantly, no hidden fees.
And unlike other leading mortgage companies, Amerisave can show you your rates without a hard credit pull. That means you can shop around without negatively impacting your credit.
See how much you could save in less than 5 minutes.
