Interest rates have steadily increased throughout the year. This steady rise in interest rates have left many homeowners in a place of confusion, wondering whether or not to refinance. For the first time in three weeks interest rates have actually decreased. According to a spokesman from Fannie Mae the average rate for 30 year fixed rate mortgages dropped from 4.37 to 4.31 and 15 year mortgage rates dropped from 3.41 to 3.39. While these rate declines are not large, it is welcome news for homeowners. If you have been on the fence about refinancing, now is the time to call your mortgage lender. Economists predict that interest rates will continue to rise throughout the year. Locking in a low interest rate now can save you thousands over the life of your home loan.
Homeowners should be aware that over the past ten years the average interest rate on a 30 year mortgage has been 5.3%. An interest rate below that means you are saving money. If the rate on your home loan is higher than 5% you should contact a mortgage banker immediately to determine how much money refinancing can save you.
Mortgage professionals predict that interest rates on home loans will continue to slowly rise over the year. The challenge is not getting caught in a sudden rate spike. In June interest rates climbed by around 0.5%, the fastest climb in over twenty years. Homeowners can avoid this roller coaster ride by locking in their interest rate quickly. If you are buying a home, or refinancing, simply tell your mortgage banker that you would like to lock in your interest rate.
Low Mortgage Rate Tips
• Prepare Your Documents – Be prepared when you meet with your mortgage lender. Bring two recent pay stubs, 2 years W-2s, 2 yeasr tax returns, 2 months bank statements, and your insurance agent information. The lender may not need all of this but by having it available you can save time in underwriting.
• Streamline Refinance – Ask your mortgage banker if you qualify for a streamline refinance. They typically don’t require an appraisal and can close faster.
• Lock in Your Interest Rate – Tell your mortgage lender that you want to lock in your interest rate and ask them what the difference in rate is on a 30 and 45 day lock. If the rate is only slightly higher for a 45 day lock you may want to consider it. That gives more time for your loan to close without a concern about changing rates.
• Respond Quickly – When your mortgage lender requests a document or asks you to sign something, respond quickly. Delays can cause you to slow down the process and lose the lock on your interest rate.
If you have an interest rate higher than the ten year average of 5.3% call your mortgage banker immediately. Ask them to evaluate your home loan to determine how much money you can save by refinancing. Interest rates are rising so this is your chance to save money before it is too late.