At the end of the first quarter of 2020 and throughout the year, mortgage refinancing activity jumped. Even as interest rates skyrocket, millions of home buyers are still choosing to refinance their mortgages, despite the ongoing pandemic.
Online mortgage lenders offer the option of completing virtually all or part of the refinancing process. Refinancing your mortgage online may be safer than going to a bank or credit union in person due to restrictions in place due to the coronavirus, making this unique lender the perfect choice to refinance for COVID-19.
You can explore your mortgage refinance options in minutes by visiting Credible to compare refinance rates and lenders. Discover Credible and get prequalified today.
How To Choose A Refinance Lender?
You can choose to work with a bank or a credit union, or with a mortgage banker. Consumer credit companies, your savings account, and loans are also options, although they are not as common.
Completing your mortgage refinancing practically during the COVID-19 crisis can save time and offer flexibility that a traditional lender can’t match. When choosing to refinance your home loan, consider these tips:
Compare the prices: One of the best ways to find a mortgage refinance lender is to shop around. Some lenders only offer conventional loans, while other lenders may also offer government programs like FHA and VA loans. A lender may offer a lower interest rate, but charge high fees. Credible can be of great help when you are ready to compare refinance mortgage loans.
Communicate easily: Being able to ask questions and easily communicate with your lender can also make a big difference in choosing the right lender, whether online or at a local branch.
Ask for a referral: Get a recommendation from a trusted family member or friend on how the process worked and if they were happy with their experience.
Check your finances: Write down your home’s value, your debt ratio, your monthly expenses and your credit score; you can get credit reports and scores from the three credit bureaus – Transunion, Experian, and Equifax.
Find the best rates and conditions: Some online lenders may offer better rates and terms than traditional lenders, which can save you money. It may also be easier to qualify for mortgage refinance with an online lender, especially if your credit is less than stellar. View pre-qualified refinance rates from multiple lenders, all within minutes. Visit Credible today to get started.
HOW TO DECIDE IF YOU NEED TO REFINE YOUR MORTGAGE.
Can I refinance my mortgage online?
You can refinance your mortgage virtually online. Thanks to COVID, it’s safer than an in-person visit to a bank or credit union and can save time because you can put together the financial documents you need for your schedule. Additionally, speaking with multiple lenders allows you to compare offers, rates, terms, and fees from the comfort of your couch.
HOW MORTGAGE REFINANCING CHANGED DURING THE CORONAVIRUS PANDEMIC.
You begin the refinancing process by submitting an application, which you complete online. If you have any questions regarding your refinance, you can always visit Credible to connect with experienced loan officers and get all your mortgage questions answered before you submit your application.
After applying, the lender will send you information; a loan estimate, your estimated monthly payments, the interest rate and more. You will also be asked to submit the documents you have gathered – pay stubs, tax returns, bank statements and W2.
When you’re ready to begin the process, visit Credible to see loan options from several lenders with fewer forms to fill out.
When Should I Refinance My Mortgage?
Mortgage rates are gradually increasing, but they are still hovering around 3%.
- 30-year fixed rate mortgage: 3.09%
- 15-year fixed rate mortgage: 2.4%
- 5/1 year variable rate mortgage: 2.79%
4 THINGS TO KNOW BEFORE REFINANCING YOUR MORTGAGE
Rates at this historic low make it a great time to consider refinancing your mortgage for the following reasons:
- You can potentially get rid of private mortgage insurance.
- Get much better terms.
- You can go from a fixed rate mortgage to an adjustable rate mortgage.
- Refinancing on an FHA loan.
- Consolidate high interest rate debt.
- Reduce your monthly payments.
- Use the equity in your home to pay for a financial emergency or finance a major purchase.
Using a refinance calculator can help you better understand how much you could save on monthly mortgage payments by refinancing your home now. Calculate the numbers and compare prices using Credible’s free online tool.
What are the disadvantages of refinancing my mortgage?
Besides the many advantages of refinancing your mortgage, you should also consider the disadvantages.
Refinancing costs money: Just like when you went through the process of applying for your first mortgage, you will pay the set-up fees, administration fees, title insurance and closing costs.
Recovery of refinancing costs: If you plan to only stay in your home for a short time, refinancing may not pay off. Indeed, it can take up to 10 years to recover the cost of refinancing and reach your breakeven point.
It can add years to owning your home for free and clearly: If you refinance a 30-year mortgage with another 30-year mortgage, you might see lower monthly payments, but this will delay the time when you can own your home without paying a mortgage.
Unfavorable market charges: You may have to pay the âAdverse Market 0.5% Refinance Feeâ currently charged for refinancings sold to Fannie Mae or Freddie Mac.
WHO IS EXEMPT FROM THE NEW MORTGAGE REFINANCE FEE?
Despite recent increases, interest rates are still lower year over year. So if you’re thinking about mortgage refinancing, explore your mortgage refinancing options in minutes by visiting Credible to compare rates and lenders, and get prequalified today.
Have a financial question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.