If you are thinking about refinancing in 2016, the one thing that you need to know is that mortgage interest rates are the lowest they have been in the last three years. The downward rate trend is still continuing thanks to the economic weakness outside of the United States. This downward trend is likely to continue as long as the economic weakness persists outside the US. However, refinancing in 2016 is not just about the low rates, it is also about credit, property, and assets.
In the past, refinancing was a challenge for most homeowners. Homeowners had a hard time securing financing because their income levels had changed, they were upside down on their current home loan, or lenders had strict guidelines that were hard to meet. However, today guidelines are a bit more flexible, unemployment rates are down, and home prices are going up. If you are thinking of refinancing, now is the time!
1. Consider your credit score and how it might impact your interest rates. Be sure to clear up any discrepancies on your credit report prior to applying for the loan. The higher your credit score, the lower interest rate you can secure.
2. Be sure to shop for the lowest rates. Do all of your rate shopping within 14 days, because the numerous requests for your credit report will not reduce your credit score, as the scoring models know homeowners will be shopping around.
Different lenders offer different rates, so it is vital that you do some comparing on sites such as Zillow. For example, according to Zillow, Citibank is offering a 3.795% APR on a 30 year fixed loan, while Bank of America is offering 3.903% and Sebonic Financial is offering 3.527%.
3. Choose your lender as early as possible because your rate quote is only good if the refinance closes within a certain period. The earlier you choose your lender and get them the required documentation for the refinance, the shorter the closing period will be on your new loan. Mortgage rates go up and down depending on the day, so the sooner you lock in your rate the better off you will be in refinancing in 2016.