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A Special Holiday Gift: Low Refinance Mortgage Rates

Michele Lerner
The Mortgage Reports contributor

Refinance Mortgage Rates Could Pay For Your Festivities

At the time of year when most people focus on gifts like the newest Xbox or on baking the best cookies, some smart homeowners will take advantage of the season’s low refinance mortgage rates to give themselves a gift that will last for 30 years.

Parties, shopping and gathering with your family are all important elements this time of year, but that doesn’t mean that you should ignore an opportunity to spruce up your cash flow for 2017 with a home refinance.

Verify your new rate (Dec 8th, 2019)

Refinance Mortgage Rates

Mortgage rates have been edging up and down as global economic and political events create uncertainty. Most people realize that won’t last forever.

An improving economy tends to push mortgage rates higher, and the Federal Reserve may decide that higher interest rates are better for the long-term health of the economy.

Even a small change in your mortgage rate could lower your monthly payment, and greatly reduce the total interest you pay during your loan term.

At 4.5 percent, the monthly payment on a $300,000 mortgage is $90 more than your payment at 4.0 percent. Over the life of the loan, you’d save $31,000 in interest with a lower rate.

Not Just Interest

Keep in mind that there’s more than one reason to refinance. While most people want a reduced mortgage rate and a lower housing payment, you could also refinance to achieve other goals.

This could be a good time to revisit your financial plans for the future in the context of your retirement, in which case you might want to switch to a shorter loan term of 20, 15 or 10 years.

If you’ve been paying your mortgage for many years, your loan balance will be smaller than the original loan amount. The lower balance in combination with a better mortgage rate could make a shorter loan term affordable.

You may also have been gambling a bit with an adjustable rate mortgage. If you want to lock in today’s low mortgage rates, it may be time to refinance into a fixed-rate loan.

Qualifying For Better Refinance Mortgage Rates

Refinancing during the holidays and at any other time generally requires sufficient home equity and a good credit profile. If you’ve put off refinancing because you didn’t think you’d qualify,  check with a lender or two to find out where you stand.

You may also want to consider a streamline refinance if you have a government-backed mortgage. Your home equity, credit and income may not be an issue in that case.

Lenders have become more flexible, new programs have been created, and your home value or past credit issues may not hold you back this time.

Property values have risen, and even a 20-point increase in your credit score might qualify you for a lower mortgage rate now.

Verify your new rate (Dec 8th, 2019)

Why Refinance During The Holidays?

Traditionally, the housing market slows a bit during the holidays as buyers place more priority on celebrations rather than house-hunting. Sellers sometimes even take their property off the market in favor of a more relaxing season followed by a January breakout of new shoppers.

For lenders, this slowdown in transactions translates to less business in their pipeline. As a homeowner looking to refinance, this slowdown can be to your advantage.

Some lender compensation plans include bonuses based on year-end numbers (within the restrictions of the Dodd-Frank Act), so you may get a motivated loan officer to expedite your refinance before year-end.

While the holiday season is frequently busy for many people, for some, business slows down a little.

Appraisers, for instance, tend to be less busy when there are fewer home purchases taking place, so you could find that your refinance goes a little faster than it would during a purchase or refi boom.

What Are Today’s Refinance Mortgage Rates?

Today’s rates are attractive if you’re the right candidate, seeking a refinance for the right reason. Check with a lender to see if your needs can be met during the next few weeks.

Verify your new rate (Dec 8th, 2019)