Rate Reduction Refinance
An interest rate reduction is a common reason for homeowners to choose to refinance. In the past, it wasn’t uncommon for people to purchase homes with interest rates well over 10 percent. Those who purchased their homes when rates were higher can take advantage of today’s historic low rates to save thousands over the lifetime of their loan. Other homeowners who borrowed with a low credit rating can get a better rate if their credit rating has improved since they applied for the first mortgage on the property. Either way, refinancing at a lower rate brings both monthly and long-term savings.
Refinancing for a reduction in interest rate makes the most sense for homeowners who stand to reduce their mortgage rate by at least a full percent and who intend to stay in their property for several years after refinancing, giving them time to recoup closing costs through their interest savings.
Those in the position to get the lowest available interest rates are homeowners with a high FICO score, however there are mortgage loans available for those with lower scores but they will have a slightly higher interest rate. In addition, a homeowner considering a refinance will need to have a certain amount of equity in their property depending upon the type of loan they are seeking.
If you currently have a mortgage with a high interest rate, consider refinancing to save money over the coming years. Interest rates are still at some of the lowest levels in history, but economic history proves they will not stay this way forever, so don’t delay. The home loan specialists at Mortgage Rates California are ready to help you find the best new mortgage to fit your needs, so contact us today to get started.