The nationwide race to refinance is on. With average 30-year fixed rates at historic lows – under 5 percent – mortgage applications are clocking in double digit gains. And nearly 80 percent of those are coming from customers looking to refinance.
But that doesn’t mean refinancing now is the right choice for everyone. In Tuesday’s Web Extra, mortgage lender Rodney Anderson explains the three ways to know if you should jump into the refi game now:
1. If you have an adjustable rate mortgage and are planning on staying in the property for a long time, you should consider refinancing, Anderson says.
2. If you have a substantial amount of equity in your home but a lot of outside debt (like credit cards), refinancing might be appropriate. After all, chances are the interest rate on your other debt is far higher than what you’re paying on your mortgage.
3. If you have an interest rate above 6 percent and can make up the closing costs within two years (and are planning on staying in the home for more than two years), refinancing is probably for you. Anderson suggests calling your lender and then getting a second opinion.
If you decide to take advantage of the historically low rates, Anderson says there’s one agrement you absolutely must get in writing. Watch the video to see what it is and why you need it.