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Home Refinance May Still be Advantageous
Homeowners have realized significant savings through home refinance transactions over the past year, since mortgage interest rates have been at near-record historic lows. While many borrowers were able to reduce their monthly mortgage payment by refinancing their home mortgage loan, if you haven't yet investigated the feasibility of your home refinance, don't despair. Financial experts predict that interest rates should remain relatively low for the first half of 2010, after which they should gradually start to increase.
Since even a small increase in the interest rate associated with a home mortgage can translate into an addition of hundreds of dollars over the life of the loan, it makes sense to try to refinance your mortgage when rates are at low levels. For borrowers who are concerned that interest rates will rise before they are able to complete their mortgage refinancing, lenders offer an option where the loan rate can be "locked" for a certain amount of time so that the borrower is guaranteed that interest rate. Some lenders will charge a nominal fee for this option, especially if the interest rate is locked for a longer period of time.
While 2009 was a banner year for mortgage interest rates, many borrowers were not able to refinance their mortgage then for a number of reasons. Some borrowers were struggling with lower incomes due to the depressed job market. The good news is that unemployment is on the decline and job openings and salaries are starting to experience growth once again. This means that borrowers who could not qualify for a home refinance previously will have a better chance to qualify for a mortgage refinance loan.
Another reason that some homeowners have put off refinancing their home mortgage is due to the uncertainty in the housing market. As home values around the country fluctuated in recent years, lenders tightened their appraisal guidelines, which made it difficult for some borrowers to meet loan-to-value qualifications for their home refinance. While real estate experts predict some of the housing market fluctuations to continue this year, there are signs that housing prices are stabilizing, and many areas are even predicted to show an increase in housing starts this year.
The economic and financial climates are both improving, and as they start to grow, interest rates will eventually rise. If you are interested in completing a home refinance transaction while interest rates are still at relatively low levels, start talking to mortgage lenders soon.
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