Rates are Down. Is It Time to Refinance?

is it time to refinance

Rates are Down. Is It Time to Refinance?

Mortgage rates have been rising since January. Consequently, the number of homeowners choosing to refinance has slightly declined. Refinance applicants went from making up nearly three quarters of mortgage applications at the end of 2020 to 60% of them today. As a homeowner, is it time to refinance during a dip like this?

The rate that you could qualify for today might be lower than what you qualified for 2 or three years ago when you purchased your home, or even refinanced last. Refinancing to take advantage of lower rates could allow you to slash the amount of total interest that you’ll pay on your home loan while potentially lowering your monthly payment at the same time.

Refinancing could mean more cash in your pocket at the end of every month, but make sure it is the right move for your specific financial scenario. How do you know when it’s the right time to connect with a mortgage broker and explore your re-fi options? Fluctuations in mortgage rates over the past several months have many homeowners asking that question.

What’s New with Interest Rates?

Although rates have been on a slow and steady climb since 2021 began, early April brought the first appreciable drop in rates in several months. By April 26, the 30-year fixed rate was averaging about 2.875%. 15-year rates also dropped slightly to 2.25%. The slight decline drew significant attention because of the current levels of demand in the market.

For existing homeowners, instead of indicating whether it’s the right time to sell and move on to another property, these numbers could be a window into whether they should refinance.

Should You Be Rushing to Refinance?

Analysts predict that the decline in rates is not likely to continue, and that both the 30-year fixed rate and the 15-year rate will begin to increase again in the coming months. Does that mean that you should be rushing to find a lender willing to help you refinance to a lower rate? While it’s true that refinancing could help you save more money each month and save over the term of the loan, it’s not always the right time to do so. Carefully considering the numbers should be your first move.

While a lower-than-usual rate is always a benefit, the reality is, it’s a gamble to try and time the market to catch one. In fact, knowing when to refinance has less to do with how the market is moving and everything to do with your unique financial picture.

start refinance button

When Refinancing Is a Smart Financial Move

Follow this simple consideration: if you can decrease the interest rate on your loan by 0.50% or more, you’re saving enough money that it will be worth the effort to find a refinancing loan.

Run the numbers for a typical $300,000 mortgage, and it’s easy to see the value. Excluding other necessary payments, such as home insurance and property taxes, a mortgage loan financed at 3.65% for $300,000 will usually require a monthly payment of about $1,400. Refinancing the loan down to a rate of 3.15% could knock $200 per month off the payment, translating into a $2,400 savings annually—or nearly two months of payments back in your pocket.

Finding Help with Forward Loans Today

Every homeowner’s situation is different, and it’s not always easy to tell whether a refinance loan is the best choice for you. However, with these simple calculations, you can get a look at what’s possible. Use this information to determine whether the current rate changes represent a strong value for your financial situation, then take the next steps.

Discover more about the potential savings that you could unlock through a refinance when you connect with our friendly and experienced mortgage brokers today. With rates always on the move, now could be the right time for you.

button schedule consultation


Your home financing, without looking back.

Type of loan(Required)

Related Posts

3 Reasons the Housing Market Downturn is a Exaggerated

2023 has been “more of the same” with housing news, and interest rates. A lot of swirling rhetoric, and experts predicting ups and downs. The housing market IS expected to experience a correction it IS expected to be different from what was seen in 2006. The primary reasons for this include: Landlord behavior: In a

Read More »

Great News on Housing Affordability

If you’re in the market for a new home, now may be a great time to buy. Since November, affordability in the mortgage market has significantly improved. One of the main reasons for this is that interest rates have come down, making it cheaper for borrowers to take out a loan. Additionally, there has been

Read More »

6 Easy Steps to Becoming a First-Time Home Buyer

Becoming a first-time homebuyer can be a daunting task, but it doesn’t have to be. With the right knowledge and preparation, you can make the process as smooth and stress-free as possible. Here are 6 Easy Steps to help you as a first-time home buyer. 1. Determine your budget: Before you start looking for a

Read More »

Buying a Home in Arizona

Buying a Home in Arizona Buying a home in Arizona can be a great decision for many reasons. From its warm weather, to its diverse job market, to its low cost of living, Arizona offers a wide range of benefits for those looking to purchase a home. The state has a variety of cities and

Read More »

Your home financing, without looking back.

Type of loan(Required)
Scroll to Top