Refinancing at Today’s Low Rates Could Save You Money

With so many people bogged down by mortgage and credit card debt, any way to save money would be welcome. Mortgage rates have remained near record lows for the past year, which could make refinancing a good option.

According to Freddie Mac’s latest Primary Mortgage Market Survey, 30-year fixed-rate mortgages averaged 3.51 percent in the week ending February 28, down from 3.56 percent in the previous week and 3.9 percent a year ago.

Meanwhile, 15-year FRMs averaged 2.76 percent, slightly lower than last week’s average of 2.77 percent. Last year at this time, 15-year FRMs averaged 3.17 percent.

“Mortgage rates eased somewhat as the consumer price index in February held steady for the second month in a row,” said Frank Nothaft, vice president and chief economist at Freddie Mac. “House price indicators, however, showed gains in 2012”

As mortgage rates continue to hover around all-time lows, homeowners may want to consider refinancing to save themselves some money.”

Tips for refinancing your mortgage

According to MSN Real Estate, there are many steps you’ll need to take in order to get the best refinance deal

Shop around: One of the most important things to do is to get offers from multiple lenders. Although you may see the average rate is at 3.51 percent for a 30-year FRM, this will vary at different lenders. That said, you should get quotes from at least two different banks.

Additionally, you should compare the fees and quality of service at different lenders and weigh those into your decision.

Don’t forget about closing costs: In many instances, refinancing at a lower rate can save you money. However, if you fail to take into account the closing costs you could actually end up spending more than what you will save. For most refinances, you will be forced to cover the loan’s closing costs. When calculating how much money a lower rate will save you, be sure to add in those costs, so you’ll know exactly how much your saving.

Lock in your rate: With so much application volume, refinances could be taking a longer period of time to complete. That said, you should get a rate-lock confirmation from your lender. This will ensure that you are able to take advantage of the low rate that you were offered when you were quoted. Without this guarantee, you may receive a higher rate than you anticipated.