Exciting News on Mortgage Rates & Smart Refinancing Tips
You may have already heard that mortgage interest rates are starting to edge lower. This is great news for prospective home buyers and current homeowners alike! The yield on the 10-year Treasury has moved into a range we haven’t seen since February this year. If the yield falls below 3.04%, we could see a significant decrease in mortgage interest rates.
With lowering interest trend, you’ve probably already started receiving calls with offers of no-cost refinances. Some may even dazzle with an unbelievable rate but watch out—they’re probably charging a full point on the origination fee and two discount points, or they may be adding the closing costs to your loan amount.
I wanted to take the time to educate you so that when it is time to pull the trigger on a refinance, you are well-prepared. Here are some general guidelines to consider when deciding whether to refinance your mortgage:
- Lower Interest Rates: If current rates are significantly lower than your existing rate, refinancing could be a smart choice. Even a reduction of 0.5% can save you a considerable amount over the life of the loan.
- Your Financial Situation: It might be a good time to refinance if your credit score has improved or if your financial situation has stabilized. Better credit scores can qualify you for better rates and terms.
- Break-Even Point: Calculate the break-even point—the moment the savings from the lower interest rate surpass the costs of refinancing. If you plan to stay in your home beyond this point, refinancing may be beneficial.
- Loan Term: Consider refinancing if you can switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or if you can shorten your loan term from a 30-year to a 15-year mortgage, often at a lower interest rate.
- Cash-Out Refinance: If you need to access your home equity for major expenses like home improvements, education, or debt consolidation, a cash-out refinance might be right for you.
- No-Cost Refinancing Offers: Be cautious of offers that claim “no-cost” refinancing. These may have hidden fees or higher interest rates. Make sure you understand all the terms before proceeding.
- Length of Stay: If you plan to stay in your home for a long time, the benefits of refinancing can be more significant. If you might move soon, the upfront costs may not be worth it.
Given the recent positive shifts, the upcoming months could be an optimal time for refinancing. It’s challenging to time the market perfectly, but BankSouth Mortgage’s one-time complimentary float-down option* is designed to mitigate this risk.
For those who’ve purchased homes through us in the last couple of years, expect a call or text soon—I’m keeping an eye on rates for you!
As always, I’m here to help, not to pressure. Feel free to reach out to discuss your specific circumstances, and together, we can determine the best course of action for your needs.
Looking forward to helping you make the most of this opportunity!
The BankSouth Mortgage Advantage:
Experience the speed of ReadyApprove from BankSouth Mortgage, where you can secure conditional approval for conforming loan limits within hours. You’ll be armed with the confidence to quickly submit an offer, and the seller will see you as a serious, prepared buyer. Have peace of mind with our FREE one-time rate float-down and no lender fee refinance options!
Take advantage of our Buy Now, Refinance Later with a No Lender Fee Refinance** option for buyers who are purchasing currently at increased interest rates. Homebuyers who started their loan application with BankSouth Mortgage on or after June 15th, 2023, and close their loan with BankSouth Mortgage will be eligible for exclusive savings. Available on primary residence only and must be used within 60 months of the close date.
*One-time float down available on 45-120 day rate locks. Float down must be executed at least 15 days prior to closing and must be at least .125 improvement.
**Must refinance after 6 months from the 1st payment date and within 5 years of the close date. Available for new applications on or after 6/15/2023. Subject to credit and property approval. Additional conditions may apply. Terms are subject to change. “No Lender Fees” only apply to origination charges.
Blog post date: Thursday, August 8, 2024
