August 24, 2020

Low rates rally refinances

With the coronavirus pandemic and attendant economic recession, many American homeowners are looking for resources, whether by saving or borrowing.

Experts say the current low mortgage rate environment makes a refinance very much worth investigating.

It’s possible to save hundreds or even thousands of dollars a year on your monthly house payments. A refinance can also be a chance to switch from an FHA to a conventional loan, eliminating mortgage insurance.

But you can borrow against your home equity, too. Even without a pandemic, a cash-out refinance is a great way to get a significant sum at a modest interest rate. If you have at least 20% equity, you can typically borrow up to 80% of your home’s value.

You can use the money for just about anything - making major purchases, paying bills or consolidating other high-interest debt (such as credit cards or car loans). Many homeowners use ta refinance to invest in the home's value, with a major remodel or other home project.

Some homeowners may consider refinancing into a shorter term loan. Interest rates are so low, the payments on a 10, 15, or 20-year loan may still rival the monthly amount owed on your current traditional 30-year mortgage!

At Bay Equity Home Loans, our experienced loan officers can help you figure out if refinancing is the right choice.

As a new mortgage loan, your refinance is going to have new closing costs and fees, which can be rolled into the new loan, or can be deducted from the cash-out amount. We'll help you calculate what’s called the break-even point - how long it will take for your savings to be greater than your closing costs.

Everyone’s financial needs are different, but a refinance could be the right solution for you.

One thing is for certain – the uncertainty of mortgage rates. Waiting for the rates to drop lower could cause you to miss out on a great deal.

Visit us today. Mortgage rates have fallen to new record low multiple times in 2020, but there’s no guarantee that trend will continue.