As COVID-19 continues to affect the job market, it’s playing a totally different role on the housing market.
Mortgage lenders are staying busy with people flocking to refinance their homes. That’s mainly due to historic low interest rates allowing people to save money during these uncertain times.
Average interest rates were at around three to five percent nationwide in the Spring of 2019. Now, they’ve dropped to nearly two percent.
Brandon Caruso, VP of Loan Operation for Today Lending, who specializes in refinancing, says the current low rates could be a way to save money. "It's an awesome opportunity, probably once in a decade," Caruso said.
Uncertainty continues to be a recurring theme among banks across the country. “In order to make it a little more attractive to folks, they dropped the rates,” Caruso said.
However, there are some things to consider before you jump on the bandwagon. The life of a loan will reset if you refinance. So, if you’re close to halfway on a 30 year fixed loan, don’t do it. Another potential downside are all the costs associated with refinancing.
"You are always going to expect a little bit of closing costs, maybe a new appraisal,” Caruso said. “So you need to make sure your home is set and ready to pass an appraisal."
Here’s how refinancing can help save you money. If you are paying 4% on a $130,000 home, you’ll pay $620.64 per month. If you refinance to 2.9%, you’ll pay $541.10 per month. In total, you’ll save about $80 each month.
To find out how much you could save, CLICK HERE for a free refinancing calculator.
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