The Final Moments to Refinance Your Home Loan
In the last few days we have seen a dramatic increase in interest rates. In a nutshell, if your target rate for refinancing was not locked last week, you will be paying 1.5 points more for that same rate today. In layman’s terms, if you are refinancing a $200,000 loan and you have to close your loan soon, then you have to pay $3000 more for that loan ($200,000x1.5%= $3000).
The latest news from the Federal Reserve is that they are willing, and questionably able, to dump $600 billion into the bond market. If this is a likely occurrence, then we should see rates bounce back. But I will add, this may be the last time that we will see them drop.
My recommendation to everyone who has any equity in their home is to call your trusted mortgage consultant and ask him/her to submit your loan file. In order to prepare, you will need to submit all of your personal data, including: The last two years of tax returns and W-2’s, the last two months of bank statements, the last month of pay stubs, and your recent portfolio account statement, and possibly another few small tidbits.
The goal is to submit all of your data and obtain an automated approval. This part may cost up to $50 for running a credit report and the obtaining the Desktop Underwriting approval, but some brokerages do this for free. Most banks, however, charge you $400 or more to secure your deal and then assign those funds towards your appraisal report. This part is personal preference, either way, you have to pay an appraisal fee sooner or later.
If you want to get ahead of the curve, contact your local broker and ask about the possibility of this game plan. They should be able to accommodate you if your target interest rate, estimated home value, & current loan amount are within range to perform according your request. Once you reach this point, hold steady. When the rates come into focus, lock! If you secure your rate for 30 days you should have plenty of time to get your appraisal done and continue the underwriting process. If you want to assure yourself of a good deal, this may be one of the only times that you can actually control the scenario from start to finish. Don’t get greedy. Once your desired rate comes into focus, make sure to lock!
Call your trusted mortgage broker to ask about how you could make this happen for yourself. Good luck!