Best Times To Refinance A Home

by Andy Hough on October 25, 2011 · 1 comment

With interest rates as low as they are now, refinancing your mortgage may be looking like a great idea. Here are a few signs that you should look for when trying to determine the right time to purchase a home or refinance an existing loan.

High Credit Score

A high credit score makes it easy to get a loan. Borrowers with a high credit score can obtain financing from banks, credit unions, lenders, and brokers. Raising your credit score just a few points can mean the difference between locking down a loan, being denied, or receiving the best rates they have to offer. You may even want to put off shopping for a home if your credit score needs help.

Low Interest Rates

The worst times for economies are often the best times to either buy a new home or do a mortgage refinancing. These are the times when interest rates are the lowest to encourage borrowers to buy homes. Low interest rates make it easier for homeowners to purchase property since the payments will be lower throughout the life of a fixed loan. It also makes it a good time for a borrower to refinance since they can reduce the existing loan payments or use the monthly excess to pay off the home even faster.

Low Home Prices

Homebuyers paid a fortune to purchase homes during the housing boom. If you have taken the time to compare home loans then you have seen just how much they have declined in value. Low home prices make it a great time to invest in the real estate market either by picking up a rental property or getting your first mortgage. Either way, cheap home prices are a sign that it is time to go loan shopping.

Cash Savings

Having cash on hand will make the financing or refinancing of a property much easier. Cash is needed for a down payment. It can also be used to lower the interest rate on an existing loan by buying points. You should also look to save enough cash to cover those costs and have some left over for emergencies.

If you notice the signs above, you may want to look into refinancing or buying a home.

{ 1 comment }

1 Cherleen @ yesiamcheap October 26, 2011 at 9:15 am

Couldn’t agree more. When your credit score is high, you can get offers at low interest rates. Look for a shorter term as well to bring your savings to a bigger value. Thanks for sharing!

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