If you own your home, we have some good news! You may be able to refinance your loan and get a lower rate.
With a mortgage refinance, you can save significantly on interest and monthly payments. Now that interest rates have been lowered by the Federal Reserve, it is the perfect time to get started on refinancing. See what options may be available to you.
How Does Refinancing Work?
The refinancing process is fairly simple. There is a standard credit check, verification that your existing mortgage is current, and an assessment of your property.
When rates are lowered, it’s possible for you to qualify for the lower rate based on your credit history and home value. A reduced interest rate means lower monthly payments
However, sometimes there are closing costs associated with refinancing which means you’ll need to be prepared to make an additional payment in order to close on your new mortgage.
Refinance Your Loan FAQs
1. Does Refinancing Affect Your Credit?
Yes. Refinancing involves running a hard credit inquiry. Whenever there is a hard inquiry on your credit, it can lower your credit score. However it will not hurt your chances for a mortgage. There is a forty five day shopping window on mortgages. This allows you to shop without fear of majorly damaging your credit. You can have your credit ran multiple times by mortgage lenders and it will only affect your score for one inquiry. This inquiry will not hit your score for 30 days from the date of the first pull. Mortgage credit reports are good for 4 months so the impact of it does not come to light on your transaction.
While an inquiry can negatively impact your score , if you do refinance, you’ll have a paid-off loan on your credit report as well.
2. Do You Have to Accept the New Loan If Approved?
No. When you apply to be considered for a new rate, it’s similar to applying for a mortgage for the first time. If you end up deciding you do not want to move forward with the refinance or switch lenders, you can decide to not accept the terms.
If you do move forward with refinancing your mortgage, you may end up paying closing costs so you’ll need to be prepared for that expense. In a lot of cases you can roll these costs into your mortgage if you have enough equity.
3. Will You Have a New Lender?
It depends. You may use your existing lender for refinancing, in which case most of the information would stay the same.
If you end up refinancing through another institution, your entire loan will be transferred to a new lender. Depending on the practices of your new lender, your mortgage may even be sold off to a different lender at a later date.
Why is Now a Good Time to Refinance Your Loan?
The Federal Reserve has lowered interest rates for the first time since 2008. Their focus is on stabilizing the market through maximum employment, stable prices, and moderated long-term investments.
Long-term investments, like mortgages, need to be appealing and accessible for buyers as well as profitable for lenders, which is why interest rates fluctuate.
Now is a good time to refinance because when the Fed lowers their rate, mortgage rates are lowered for a period of time. Eventually, though, they will fluctuate and possibly increase, meaning you lose out on your chance for a reduced interest rate and lower monthly payment.
Looking to Refinance Your Loan in Kansas City?
Contact Kansas City Mortgage Guy and find out if you qualify for a lower rate today! We’ll talk you through the process, let you know exactly what you need to apply, and process your application quickly so we can get you the best rate possible.
We offer assistance with new purchasing and refinancing and always make sure you get the best rate possible.
Refinancing your loan is a big decision and we know you don’t take it lightly. We want to help you understand your options and the refinancing process before we get started. Give us a call.
Interest rates have been lowered! Contact Kansas City Mortgage Guy to find out how much you can save on your mortgage!