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Want to Refinance Into a Record-Low Mortgage Rate? Do These 4 Things

·4 min read
Want to Refinance Into a Record-Low Mortgage Rate? Do These 4 Things
Want to Refinance Into a Record-Low Mortgage Rate? Do These 4 Things

Mortgage rates are currently the lowest they’ve been in, well, ever. If you’re a homeowner with an existing mortgage, you might want to consider refinancing — even if your current loan is only a year old.

Refinancing at today’s record-low rates could save you a few thousand dollars a year in interest, and tens of thousands of dollars over the course of your loan. Obviously, that's serious money.

If you think refinancing might be right for you, here are some tips on how to make sure you get the best rate possible.

Be certain a refi is the right move

Before you commit to a refinance, there are a few important things you need to consider. Today’s basement-dwelling rates may look good on paper, but depending on the terms of your existing mortgage, you might be subject to loan conditions that could make refinancing a bad call.

Some mortgages carry a penalty for early repayment, especially during the first few years of the loan. You also could run into legal complications if you took advantage of a local government grant program, like one for first-time buyers.

Before you start looking at refis, read your loan documents carefully to make sure you won’t get dinged with exorbitant fees.

You also need to make sure that a refinance now won’t end up costing you more in the long run. If your current mortgage is for 30 years and you’ve already paid off half of it, refinancing into a new 30-year mortgage could cost you tens, or possibly hundreds of thousands of dollars in additional interest.

Talk with a pro

The best way to be sure refinancing is the right decision is to consult with a professional. Certified Financial Planners are more accessible than ever these days: They're available online now through a company like Facet Wealth, which offers top-of-the-line financial advice without the high fees.

In addition to providing you with advice on your refi, a CFP can help you create a retirement savings plan that’s tailored to work with your mortgage.

That way, once your home loan is fully paid off you can rest easy knowing you’ve already got a chunk of change stashed away for your golden years.

A simple 30-minute call with Facet can get you thinking about your financial goals and priorities — and how a refinance can help you achieve them.

Compare rates to find the right loan

couple comparing mortgage rates sitting together at kitchen table
UfaBizPhoto / Shutterstock

With mortgage rates so low, you might be tempted to jump at the first refinance offer that comes along. But shopping around and comparing rates could wind up saving you even more on your new monthly payment.

You can always do it the old-fashioned way, by researching local lenders and contacting them individually about their rates — but that could eat up a lot of time.

A better option is to go online, gather quotes from at least three lenders, and compare them.

Typically, you answer just a few questions to be connected instantly with lenders in your state or area that will meet your needs.

You can easily do a side-by-side comparison of lenders’ interest rates, loan terms, and monthly payments, and you can check user reviews for each bank, credit union or loan company to help inform your decision.

Checking mortgage rates will never impact your credit score. If you’re planning to refinance, you owe it to yourself to shop around and find the best rate available.

Protect your investment for your family

It isn’t pleasant to think about, but the possibility that something unexpected might happen to you is important to consider as a homeowner.

Once you’ve refinanced, you want to make sure your family won’t have to worry about how they’d make the mortgage payments if you were to die.

The best way to ensure that your family will be financially secure after you’re gone is to take out a life insurance policy. And while the idea of shopping for life insurance might seem a bit uncomfortable, using a service like Quotacy can make the process painless.

In just minutes, Quotacy will find you the three best rates for your and your family’s specific needs. Depending on how old you are and where you live, you could find a policy that offers your loved ones $1 million in financial protection for less than $7 a week.

It never hurts to be prepared, and even though you can’t put a price on peace of mind, with Quotacy you’ll know that you’re getting the best coverage available.