It is no secret that many homeowners are interested in refinancing rates when they are renewing their mortgage contracts. This is especially true for people who have found the perfect home for themselves and want to remain in their current homes for many more years. With the economy is changing so fast it can be difficult to determine just how much your mortgage rates will change within a few months. However, knowing what to expect ahead of time can help you make the right decision when it comes time to shop for your next mortgage.
The first thing to consider is exactly how long you plan to stay in your home. If you are only planning on living in your home for three years then you can find some great rates on a fixed term mortgage. This is done through a short-term mortgage that pays off when the contracted term ends. Although this option can save you money in the short term, it will cost quite a bit of money in the long run. In fact, you could end up paying several thousand dollars a year in mortgage insurance premiums alone!
There are also several ways to refinance your mortgage in order to lock in lower mortgage rates. One way is called a “second mortgage”, which is exactly what it sounds like. You take out another loan for the total value of your home. The lender then pays off the original loan leaving you with two mortgages – one with a lower interest rate and one with a higher interest rate.
Another great way to refinance is through a “Home Affordable Refinance.” This process allows you to refinance your home and get a lower interest rate while decreasing your payment amount. In order to qualify you must be in a homeownership situation where your income and debt are both manageable. This program also allows for larger payments compared to other refinancing programs.
If you cannot qualify for an Affordable Home Refinance or another refinancing program due to bad credit, you may still be able to qualify for a “Homebuyer’s Loan Refinance.” This type of program is similar to a second mortgage, but you don’t need to be in a homeownership situation. Instead you can use this type of loan to purchase any type of property including commercial properties. While this program has better qualifications than a first mortgage, you must be a resident of the United States and own your home. All in all this program has a better approval ratio than refinancing your home.
If you have found yourself wondering where you can find the lowest mortgage rates, you should take advantage of the current economic conditions. There are many different lending institutions that offer mortgage refinancing at reasonable rates today. Some people even make money by flipping their old mortgages and using the profits to pay off their existing mortgages.
The United States Federal Reserve is one of many banks that offer low interest mortgages to help Americans improve their financial situation. Unfortunately the Federal Reserve is also very busy. Interest rates are very low on bank loans right now because the economy is improving. Right now the cost of borrowing money is lower so banks are more willing to make these types of loans to consumers. In addition to Federal Reserve Bank interest rates, many private lenders have low interest rates as well.
If you are looking for the lowest rates available on a new mortgage, you need to take a close look at the qualifications of the refinance. Many lenders will require that you have been paying a certain amount on your mortgage for several years. If you have been paying on your home for only a few months you will not qualify. Finding the best 10 year mortgage rates should be your primary goal when shopping for a new home loan.