Even if you’ve just bought a home, it is tempting to watch mortgage rates fall Refinance your existing loan. After all, even a small decrease can have a big impact on savings.
Cindy Couyoumjian, founder of Cinergy Financial and author of Redefining Financial Literacy, used the following example to illustrate this point.
“Let’s say your mortgage payment is $ 1,000. If you lower your interest rate by 1%, your payment will be reduced by $ 100,” she explained. “That’s $ 12,000 in savings over a 10-year period. When it comes to home refinancing, you need to consider the bigger picture. A 1% decrease in the interest rate can result in thousands of dollars being saved over the life of the loan will.”
Using a Online refinancing calculator for mortgages can help you determine what your new monthly mortgage payments could be and how much you could save with a lower interest rate compared to your original loan.
As with everyone Mortgage refinancingUnderstanding the terms of your current home loan, as well as your mortgage refinancing options, will help you make the best decision. Curious about current refinancing rates? Visit Credible to get pre-qualified prizes without sacrificing your creditworthiness.
How Soon Can You Refinance Your Home After You Buy?
How quickly will you be able to do that refinance your home loan depends on the type of mortgage you have. While some homeowners can refinance soon after they buy their home, others may have waiting times of at least six months or more.
See how different types of home loans affect the mortgage refinance timeframe.
1. Conventional mortgage: If you have one conventional mortgageThat said, it’s backed by Freddie Mac or Fannie Mae. You may be able to refinance your mortgage as soon as you close your home.
That said, some mortgage lenders have a “spice” period, which is a set amount of time that you have to wait before you can refinance your home loan. If your mortgage lender has a spice requirement, you may be able to work around it by applying to another lender. Of course, you should make sure that there is no prepayment penalty in your existing loan.
2. State mortgage loan: These types of mortgages have different refinancing periods. Here are the guidelines:
- FHA loan: If you have an FHA loan (insured by the Federal Housing Administration) and want to refinance yourself by securing another FHA loan, you can do what is known as a “loan.” FHA Streamline Refinance. This has a waiting period of 210 days from the closing date of the original loan but does not require any further assessment. If you are interested in a payoff refinance where you take out a new home loan for an amount greater than you owe on your current mortgage and pocket the difference, you must treat the house as your primary residence for at least 12 months.
- VA loan: If you have a VA loan (supported by the Veterans Affairs Department) you have to wait 210 days or a period that allows enough time to make six payments.
- USDA loan: A USDA loan (backed by the U.S. Department of Agriculture) requires your payments to be made on time 180 days prior to the refinancing request. In addition, your existing home loan must be closed 12 months before the USDA refinance application is initiated. Furthermore, homebuyers must comply USDAs Debt-To-Income Ratio and Loan Requirementsand the maximum loan amount cannot exceed the original loan amount at the time of purchase.
Do you have any questions about refinancing your mortgage? Contact Credible’s experienced loan officers and you will find the answers you need.
What are today’s mortgage rates?
As the pandemic continues to create economic uncertainty, mortgage and mortgage refinancing rates will remain comparatively low year-on-year.
After immersion in 50-year lows in January 2021Interest rates rebounded and hovered near 3%. Interest rates are expected to stay at current levels as the Federal Reserve has announced that it will keep long-term lending rates low indefinitely. Mortgage rates have barely risen above 5% since the 2008 recession, and the National Association of Realtors expects rates to average 3.1% in 2021, up from 3% in 2020.
If you think refinancing is the right move, then you should consider using it Credible. You can use Credible’s Free online tool to easily compare multiple mortgage lenders and view pre-qualified refinancing rates in just three minutes.
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