You may have considered refinancing during the pandemic, but you may have been unsure about whether that was the best time. Should you wait to see if mortgage rates in Utah fall even lower? Or will you miss out on a better deal by waiting? It can be hard to tell. You need a Utah mortgage lender like Integrity First Lending on your side that knows the ins and outs of refinancing.
There are several reasons homeowners in Utah are interested in refinancing. One of the most common reasons to refinance is to take advantage of lower interest rates. Interest rates have fallen over the past year, but in order for refinancing to make sense, the interest rate needs to fall enough to save you money.
Of course even a tenth of a percent can save you money over the life of the loan, but the process of refinancing also costs you money, so you have to do the calculations to see if you will come out ahead. Closing costs are often 2% to 3% of your loan, which can be substantial, depending on how much you want to borrow. You may also have to pay for an appraisal, lawyer’s fees and other costs.
If you aren’t saving enough with your lower interest rate, refinancing might not be worth it. It isn’t always easy to figure out, so that’s why it’s good to have help from a trusted mortgage company in Salt Lake City.
When you originally took out your mortgage, you might have chosen a 30-year loan in order to have monthly payments that were low enough to afford. If your circumstances have changed, however, and you can now afford higher payments (and take advantage of a lower interest rate), you could refinance your home in Utah and choose a shorter term, such as 20 or even 15 years.
The interest rates for these shorter-term loans are even lower — plus, you save money by paying off your home quicker.
Another reason homeowners might want to refinance their home in Utah is to switch from an adjustable rate mortgage to a fixed-rate mortgage. An ARM usually offers lower interest rates at the beginning of the loan than a fixed-rate loan. However, at the end of this introductory period, the rates go up, and can continue to fluctuate over the life of the loan, unlike a fixed-rate mortgage, which stays the same.
Some homeowners prefer the certainty of a fixed-rate mortgage, but needed the affordability of the lower rates when they first bought their home.
If you’re looking to save money by refinancing your home in Utah, consult with the mortgage lenders at Integrity First Lending. We’ll look at current mortgage rates, run the numbers with you and help you determine whether now is a good time to refinance your mortgage.