Now is the Time to Refinance

Easy Steps to Help Make Sure You Don’t Leave Money on the Table

A fantastic rate is just one of the many reasons now may be the best time to call your lender, but some people still haven’t done it. With mortgage interest rates still hovering near the lowest levels in history, many are wondering if now is the right time to refinance their existing mortgage loan. Should you follow the crowd?

74% of homeowners have not refinanced their current mortgage loan, according to a recent survey. Surely there’s some sense in the decision not to refinance, given that the overwhelming majority of homeowners have not. One might think so, but the survey also cataloged the homeowners’ reasons for not refinancing, and the responses weren’t exactly compelling. Among the most popular answers, homeowners’ reasons included not saving enough, closing costs being too high, and too much paperwork involved, but another figure also stood out.

38% of the homeowners surveyed did not know their current interest rate.

Therein lies the problem. Sure, mortgage interest rates are among the lowest they’ve ever been, but that means nothing to a borrower with no basis for comparison. Knowing your current mortgage rate is perhaps the single most important factor when considering a refinance. A homeowner’s current rate determines how much they stand to save over the life of their loan and on their monthly mortgage payment. With so many of the homeowners surveyed not knowing this crucial figure, how could they possibly know whether they would save by refinancing? Ironically, borrowers don’t have to perform complex calculations or spend hours on the phone to obtain this fabled number of such significance. It’s printed on almost every mortgage statement!

The Importance of Knowing Your Rate*

Consider a current mortgage rate of 4% on a $200,000 30-year mortgage. Reducing the interest rate to 3% would result in savings of almost $40,000 over the life of the loan. Now consider that our interest rates have dropped as low as 2.25%, then the importance of knowing your current rate becomes clear. Knowing your current mortgage interest rate, you can use various online tools, like our Current Rate Calculator, to determine just how much you may be giving your lender instead of claiming for yourself by refinancing your home loan. Having that knowledge at your disposal changes the question from “why aren’t people refinancing” to “why aren’t more people refinancing?”

While mortgage interest rates are indeed at historically low levels, mortgage rates fluctuate. Holding out until rates drop further is not the best strategy, as mortgage interest rates have only one way to go right now- up. It may not be too late, however. Locking in a low rate today means securing those savings and ensuring your rate stays low even if the national mortgage rates go up.

Savings Aren’t the Only Reason to Refinance Right Now

Given the state of the real estate market, right now may be the perfect time to refinance with more options. With home prices skyrocketing and bidding wars becoming the norm, fewer people are buying houses with a home loan. In turn, lenders are prioritizing refinance customers, meaning more attention on your loan and more refinance options. Lenders are more likely to offer pricing specials, waived appraisal fees, or closing cost credits maximizing your saving potential as well as attention from your lender.

This focus on the refinance market has also created an opportunity for lenders to innovate and develop new products and options to fit the specific needs of their borrowers. On Q Financial used this opportunity to invest in technology and processes that make refinancing easier and simpler for homeowners. Using online document verification and automated underwriting, borrowers can complete their refinance almost entirely online and from any mobile device, virtually eliminating the burdensome paperwork that deterred some homeowners.

Easy Steps to Get Started

It’s clear that there’s never been a better time to refinance, so how can you decide if you’re ready?

  1. Pull up your most recent statement or call your lender to get your current rate. Knowing your current rate and how it factors into your savings is critical to determining how much money you’re giving your lender.
  2. Know your loan balance. Find out how much you still owe on your mortgage to help you figure out what loan terms might be best for you.
  3. Know your credit score. Your interest rate is the result of many factors, including your credit score. Keeping this number in mind will give you an idea of your new rate.
  4. Hop onto our Current Rate Calculator. Our Current Rate Calculator uses real-time, current interest rates to determine how much you could save by refinancing and how much you would pay in closing costs. You might be surprised by how quickly you’ll recover those closing costs through your savings.
  5. Reach out to our team of expert Mortgage Consultants. Our mortgage consultants are ready to guide you on your refinance journey and are eager to help you reduce the cost of owning your home.

Contact us today. We’re waiting for your call!

* The following loan scenario is only an example. Actual amounts, fees, and rates vary depending on each individual borrower’s situation and additional factors. Loan scenario is based on a fixed 30-year Conventional loan with a purchase price of $200,000, 3.5% down payment equaling $7,000, Interest rate of 3%, and APR of 4.28%. Additional estimated funds due at closing $5,110. Approximate monthly payment of $901. Loan scenario does not include additional costs/fees associated with monthly mortgage expenses such as HOA fee. All amounts shown are estimates and will vary for each loan. Rates and fees are subject to change at any time. This is not a commitment to lend or extend credit. Programs are subject to change. Loan approval is subject to applicant’s qualification for a loan program.

**Information is subject to change without notice. This is not an offer for extension of credit or a commitment to lend. Some restrictions may apply. Loan approval is subject to applicant’s qualification for a loan program.  On Q Financial does not guarantee that each applicant will receive a loan. Rates and fees are subject to change at any time and are not guaranteed. Programs are subject to change without notice. ONQ1005210685d00000H10Tn

About the Author

Before opening On Q Financial in 2005, John Bergman originated and funded 450 units a year as a loan officer. He founded the company with just $1M of personal life savings—committed to his vision for building the best independent mortgage organization in the industry.

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