Sometimes, fall can be slow for real estate agents and loan officers, but that’s not the case lately -- in fact, the market is active right now, especially when it comes to refinancing.
So, why is this such a good time to refinance, and why should people consider doing so?
Eric Fontanot, president at Houston-based Patten Title, provided some answers to four key questions.
Why now, when it comes to refinancing?
Mortgage rates are still low, as they’re ranging from 2.5% to 3.5%, and home values are still going up, increasing the margin available to borrowers, Fontanot said.
“It’s just a really good time to borrow money and lower your payment,” he said.
How long will rates stay this low?
Fontanot said the low rates are here to stay for a while, possibly well into 2021. The Federal Reserve has plenty of incentive to keep rates low while the pandemic continues on.
“They have to continue the stimulation of the economy and move things forward and not to have the dollar lose value,” he said. “There is a challenge they have, and raising interest rates can put a crunch on things.”
What should people consider before refinancing?
There are several factors that need to be considered before going into a refinance, whether it’s how quickly other higher-interest debt can be paid off with money gained from a refinance, or how long someone plans to stay at that particular house.
“Every borrower has to examine their individual situation,” Fontanot said. “They have to decide if the upfront cost or adding any additional money to their mortgage is worth it to their long-term plan. Being prepared, having a semi-idea of what your future is going to be in that particular home, and taking into account your personal finances -- those are all important things to do before pulling the trigger.”
What do people need to know heading into the refinance process?
The most important thing for anyone refinancing is to be prepared and prompt with the seemingly countless pay stubs and other documents that are required to start the process.
“There’s the shiny part and the work that comes with it,” Fontanot said.
But the more cooperative and timely borrowers are, the faster the refinance can go through and the faster savings can be enjoyed.