Experts say now is the right time to refinance home loans

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FRESNO, California (KFSN) – Interest rates on home loans are constantly changing, but today they remain lower than what we have seen for years.

Not only will this affect those in the new home market, but perhaps now is the right time to refinance and lock in a lower rate.

“Getting cash on a mortgage is still the cheapest interest rate than a second one, a line of credit or even a cash withdrawal from a credit card,” said Paul Salazar.

Salazar, a mortgage lender with Sierra Pacific Mortgage, says skyrocketing property prices have led to a record amount of home equity.

Although interest rates have risen slightly since 2020, they are still low enough to prompt many homeowners to wonder if now is the time to refinance their home loans.

“This is still a historically low level. Back in 2003, when I bought my house, the interest rate was five. Right now, the average interest rate is somewhere between 3.875 and 3.5, so if it rises a little, it’s still okay, ”he said. Salazar said.

Salazar recommends considering refinancing if your credit rating or debt-to-income ratio has improved dramatically since you first took out a home loan.

Using home equity in your home to lower monthly payments or cash out is something he often sees these days.

“In 2021, people are actually abandoning capital because its value is growing, so now they can withdraw capital, renovate a house, pay off debt, and go on vacation. This is what is happening. right now with home refinancing, ”Salazar said.

While lower interest rates will benefit most homeowners, refinancing may not make financial sense for some.

Experts warn that if you cannot afford the closing costs or plan to relocate soon, you will not reimburse the closing costs ahead of the sale.

Experts say that when refinancing, you will need a credit rating of over 700 because the better the credit rating, the higher the interest rate.

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