The coronavirus pandemic has led to a dramatic decline in mortgage rates. But that doesn’t mean now is a good time to refinance for everyone. 'If you’re in your forever home, it might make sense to refinance with a half-point rate decrease.'
The coronavirus pandemic has led to a dramatic decline in mortgage rates. But that doesn’t mean now is a good time to refinance for everyone.
Read more: Home prices continued to rise even as the coronavirus pandemic swept across America, FHFA says “If you’re in your forever home, it might make sense to refinance with a half-point rate decrease,” said Holden Lewis, home and mortgage expert at personal-finance website NerdWallet. “But if you plan to sell the home within five years or so, it’s most likely not worth it because you’ll pay more in fees than you would save during that time.”
Choosing a shorter term has its trade-offs though, mortgage industry experts warn, if locking into such a loan means making larger monthly payments. The standard 30-year mortgage offers flexibility. Along those lines, you can prepay your interest by paying for mortgage points. The upfront cost, again, will be higher if you do this, but will save you thousands in interest.
— Brian Koss, executive vice president of Mortgage Network “The V-shaped bounce back was kind of a pipe dream in the first place, and it’s looking less and less likely, notwithstanding the recent strong data that we’ve seen,” Kapfidze said. “I’ve been anticipating that lenders are going to get more and more conservative and restrictive with their lending standards.”
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