Refinance mortgage

The average rate for a 30-year fixed-rate mortgage now stands at 3.45%, the lowest since 2016. More than 11 million homeowners stand to save an average of $268 per month on their mortgages if they were to refinance at today’s rates. And that means this is a good time to look at refinancing your mortgage, but I have some questions you’ll want to ask yourself before you decide to refinance.

 You need to consider how long you plan to stay in the home. Refinancing costs money, you want to have the loan long enough the for the monthly savings to exceed the closing costs.

 To save money with a refinance, the general rule of thumb is that the new interest rate needs to be 50 basis points lower than your current one. If your paying for mortgage insurance refinancing might not be a good option.

A recent study from LendingTree found that one in four mortgage refinance applications is denied. The most common reason applications are denied is that the borrower’s debt-to-income ratio is too high, followed by having poor credit. Taking steps to improve both your debt-to-income ratio and your credit score ahead of applying for a new home loan will increase the odds of getting improved.

 Because your existing lender already has your personal information and payment history, refinancing with them can often be an easier process. Additionally, they have a vested interest in keeping your business, which will push them to compete as much as possible with other lenders’ offers.

You can save real money now by refinancing just make sure it’s right for you.