Many Americans who currently hold a mortgage are asking themselves if now is a good time to refinance, or when a good time might be.
2022 has been rough in terms of inflation and rising costs. Many people are struggling to afford gas, food, and even utilities. The rate for August was 8.5%.
In response, the Federal Reserve has decided to drastically raise interest rates to offset the rise of inflation.
On Sept. 21, the interest rates were boosted by .75%, which brought them to 3.75%. More increases are expected in the future to help slow the rate of inflation, according to Marca.
With interest rates rising, when is a good time to refinance a mortgage?
As the rates change, people are wondering if and when a good time to refinance their mortgages might be.
Overall, it would not be a good idea for someone to refinance their mortgage right now. Refinancing would be a better idea once interest rates start to go down again. Despite it being a bad idea for most, it doesn’t mean that applies to everybody.
The only reason to refinance a mortgage is to save money and reduce your interest rate by at least 1%.
Refinancing could end up costing more money due to fees. Fees you may end up paying for to refinance your mortgage include a credit report fee, loan origination fee, and an appraisal fee.
If you choose to refinance your loan now, make sure it’s because it saves on your interest payments or helps you pay off your loan sooner.
Your credit score will play a part as well. If it increases, it could be a good idea to refinance and get a better interest rate.
Choosing to refinance your mortgage is a personal decision, and in some cases simply waiting the economy out could be the best choice.
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Samantha edits our personal finance and consumer news section. Have a question or lead? Send it to [email protected].