This story is sponsored by Veritas Funding. Learn more about Veritas Funding.
To refi or not to refi? Sometimes it might be hard to find a straight answer to the question of whether or not refinancing your home loan makes sense. But if refinancing your mortgage would save you money, every month you wait is just wasted cash.
In fact, there are several reasons now may be a great time for you to refinance.
Rates are still historically low
If you thought mortgage interest rates were better last year, well, they were. Rates have slowly ticked upward since 2012 when the country hit a historical low of 3.35 percent, according to Freddie Mac. With rates now sitting more than a percentage point above that rock bottom, they’re still pretty attractive — especially if you’re looking at the big picture. For example, in the early 1980s, mortgage rates hit 18 percent, with rates of 8 percent as recent as 2000.
Take a trip back in time and you’ll soon realize just how historically low today’s rates continue to be. Business Insider reports that interest rates in recent years are the lowest in the last 5,000 years of civilization. So take heart; refinance rates for your craftsman-style bungalow today are but a mere fraction of what you’d pay for a Roman villa circa 300 A.D.
You could shed that insurance payment
If you purchased your home with a lower mortgage rate than today’s, you might be hesitant to even consider a refinance. But while interest rates have risen slightly over the last several years, home values have increased substantially. That means you’ve likely gained some (or a whole lot of) equity along the way – and you may be paying private mortgage insurance (PMI) needlessly.
Getting rid of that PMI requirement can be a challenge, according to Bankrate, because your lender may require a formal appraisal process that could take months to complete. Additionally, if you’re paying Federal Housing Administration Insurance for an FHA loan, you’ll only shed this requirement by refinancing to a non-FHA loan.
Talking to a mortgage broker can help you determine whether refinancing to a new mortgage program can save you money on a monthly basis — or for the life of the loan.
Perfection isn’t a requirement
Low interest rates are just discouraging when you don’t have the credit or income requirements to take advantage of them. If your financial situation has kept you from refinancing your mortgage, you might be surprised to learn about refi programs designed for homeowners with imperfect credit, low or no equity or fluctuating income due to self-employment.
An FHA loan, for example, may be a good option if you have little or no equity in your home, a lower credit score or more debt than lenders typically like to see in a mortgage applicant. Refinancing with a VA loan, if you qualify, can be even more advantageous, as many consider it one of the best loan programs available. What’s more, VA loans typically have much lower requirements for credit scores, home equity and debt-to-income ratios than conventional mortgages.
If self-employment has kept you from refinancing, it might be time to explore your options. Though refinance transactions require a steady financial history, there are loan programs available specifically for those who call themselves the boss, like the Self-Employment Solutions Loan from Veritas Funding, which doesn’t require tax returns and qualifies you based on gross deposits.
You’ve got (better) credit
Sure, there are refinance programs for homeowners with imperfect finances. But if your financial situation has improved recently, that’s also a great reason to refinance. According to MarketWatch, the average FICO score hit an all-time high of 704 last September. If your score has shot through the roof (or at least nearer to the ceiling) in recent months or years, you may qualify for a better mortgage rate. A mortgage broker can help you see what loans may work for you.
Ready to refinance? Visit Veritas Funding to see how much you can save.