Mortgage Refinancing Boom?
It looks like we’re already into a mortgage refinancing boom period. As the FED lowers the central rate, banks and secondary market lenders will offer lower rate mortgages.
You might consider a financial Tsunami, given how many mortgage holders need to refinance from now through 2026.
When homeowners race in to refinance in the next two years, they’ll enjoy a good sized reduction in their payments. That will have good effects on the economy and free up the housing market as well. Mortgage rates are dropping, and with the FED’s announcement in mid September, more homeowners will seek to renegotiate/refinance or open new mortgages.
The rate at which homeowners look to refinance is about a 2% FED rate drop. Some experts suggest that a 5.% mortgage rate will really draw refinancers in. According to Redfin, 89% of current homeowners with mortgages have an interest rate below 6%. We have to remember, people took out their mortgages during the pandemic at rates down to 2% or 3%, so some will be feeling pain when they refinance.
Mortgage Refinance Rates According to Zillow:
The Mortgage Refinancing Process
Refinancing your mortgage means replacing your existing home loan with a new fresh one, often with different lending terms.
You can arrange to acheive a lower interest rate, lower your monthly mortgage payments, change the loan term, or switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
You’ll need to check your bank or lender’s quote and as well, search online via Google to find and compare various lenders, gathering information on available rates, fees, and closing costs. Once you’ve found a lender, you can submit a formal mortgage application. The bank or other lender will want to you to provide income verification, undergo a credit check, and they may want to do a property appraisal to assess the home’s current value. If approved, they’ll give you a loan estimate detailing the terms of the new mortgage for your perusal and then you can agree to the mortgage terms.
Then in closing your old mortgage, the new mortgage terms will take effect. You can learn more about the full process on the Redfin website.
See more on the latest and lowest mortgage rates.
