Is "now" the right time to refinance?
When it comes to mortgages, today’s low interest rates make now a great time to refinance. Just a small interest rate reduction could translate into valuable savings each month. But, with all of the uncertainty, is now the right time to move forward with any big financial decision? If you’re pondering "to refinance, or not to refinance" we’re here to help answer questions about your options in today’s current environment.
Understanding interest rates
After rising to a peak in November 2018, interest rates fell through 2019 and continued their decline since the start of 2020. The average rate for a 30-year fixed rate mortgage has fallen from 4.94% in November of 2018 to 3.33% at the start of April 2020.1,2 While it’s impossible to say with certainty what the future holds, interest rates are expected to remain low throughout at least the end of 2020, if not longer. While every loan and borrower are unique, a general rule is that if your present rate is at or above the national average, you may want to consider a mortgage review.
Benefits to refinancing
When looking at your refinancing options, you can choose to emphasize different benefits. Some borrowers want to opt for the lowest possible monthly payment, while others might want to have the shortest term possible in order to pay the loan off as fast as possible. These choices can also be affected by how and why a refi can help you achieve your financial goals. Another general rule is that for a refinance to make financial sense, you should plan to be in your home long enough to "break even" (the point at which you recoup in savings costs of refinancing).
Refinancing had already been booming in 2019 as interest rates fell to historic lows. So while refinancing now might be a good idea, it’s also a rather popular one, especially with Millennial homeowners.3 That means that many lenders are experiencing very high volume of requests, which could potentially make loans slower to process. Additionally, as a result of the coronavirus many banks and lenders have also increased their requirements for certain types of loans, especially for government-sponsored programs.4 This includes raising minimum credit scores and requiring more detailed proof of employment and income. A conversation with an experienced loan officer can help clarify these changes, and how they might or might not affect you. And at Proper Rate, our Digital Mortgage and tools like FlashCloseSM can help make the refinance process as safe, simple and secure as possible.5
Safe, simple and secure
As people continue to find ways to respond to the coronavirus, the real estate and mortgage industries are quickly implementing technology that makes it possible to adhere to social-distancing practices and still safely and securely refinance a home. At Proper Rate, most of these practices were already in place prior to the pandemic, with technology originally created for convenience and efficiency suddenly reaching new levels of significance given social distancing. We’re proud to offer a digital process, so that you can enjoy a safe, simple and secure refinancing experience. Our Digital Mortgage makes it easy to get started from the comfort of your couch and start reviewing your refinancing options.
Pre-approval can make a big difference
One last pro-tip to keep in mind is that many experienced homebuyers thinking about refinancing don’t know that they need to get pre-approved all over again. But it makes sense you need to get pre-approved the second time around—you’re different than when you first bought your home, and the same goes with your finances. But thanks to Proper Rate’s digital tools, getting pre-approved is faster, simpler and more efficient.
If you’re still pondering whether "to refinance, or not to refinance," our expert loan officers are always available to talk through your options and provide answers unique to your situation.
*FLASHCLOSE is a service mark of Proper Rate
**Proper Rate, LLC is a private corporation organized under the laws of the State of Delaware. It has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture or any other government agency.
 Savings, if any, vary based on consumer’s credit profile, interest rate availability, and other factors. Contact Proper Rate, LLC for current rates. Restrictions apply.
 FLASHCLOSE is not eligible for all loan types or investors. Eligible for conforming and jumbo loans as well as primary, 2nd home and investment properties. Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Title company restrictions may apply, not eligible for HFA programs. Contact Proper Rate for current rates and for more information.