5 Effectual Tips for Refinancing as Bank Mortgage Rates Mounts

So, you want to refinance your home but mortgage rates are rising. This could be a legitimate concern for many people of Florida as the rates are perhaps going to ascend as the economy gathers steam. Bank mortgage rates are still traditionally low, and according to many mortgage analysts and economists, they aren’t estimated to go beyond 5%. Don’t worry, there is still some time to refinance. 

Here are some essential tips to help you refinancing effectively in a generally rising rate environment.

Be Prepared to Make your Move

Though interest rates aren’t anticipated to shoot up radically–as mentioned before, they’re expected to stay below five percent through the end of the year. The probability of getting them lower than they are now is extremely small, so the sooner you act, the better off you will be. Start exploring what kinds of rates you may qualify for now to get the ball rolling.

Consider Refinancing for a Shorter Period

Refinancing your mortgage for a shorter period can give you a lower interest rate than a thirty-year mortgage. The shorter-term mortgages are likely to be lower than standard thirty-year loans, so you will be able to save significant money on interest charges. Remember your monthly payments will most probably increase, but you will save a lot over the long haul.

Make Sure You Have a Good Credit Score

It may not be worth to act fast if your credit score isn’t in top shape. Your credit score plays a huge role in the rate you can get on a mortgage. Just because low mortgage interest rates are out there doesn’t mean you’ll be able to get them. Don’t worry you can possibly improve your credit score significantly by 50 points or more by doing things such as paying off credit card debt. Besides, pay your bills on time and try to keep your credit utilization low. 

Don’t Miss out on Pay Points

You will have the opportunity to pay points to secure a lower interest rate before closing on your refinanced loan. If paying points can significantly lower the rate in a rising situation, this can be a smarter move. One point equals 1 percent of the amount of loan. If rates fickle, you might have to pay more for the points. Still, they are worth it if rates are on the way up.

Utilize Rising Home Prices to your Advantage

Home values are rising along with rates. Now might be a good opportunity to use your home’s equity through a cash refinance loan. However, be cautious while doing so. The best thing you can do with equity is to invest it in things that will pay you back. With the help of home equity loan or home equity line of credit, you can also access your home’s increasing value.

So, if interest rates are rising or are about to, you should chase the above-mentioned tips and tricks. It will help you to save yourself from paying a lot more interest each month.