The recent rates show that there has not been a significant change over these years. The window to the historically-low rate is still open. The average rate on a 30-year fixed home loan is 4.22% whereas a 15-year fixed rate is at 3.44%. The interest rates are still below 4%, so this makes refinancing a lucrative option. Many borrowers only relate the interest rates to the refinance rates. However, refinancing goes beyond it. Refinancing is also important to consider when you want to move and sell the house in the next years.
So, in this article, we mention how to make the best out of the current refinance rates in Virginia.
Have a Look at the Home Equity
Qualifying for a conventional refinance mortgage with as low as 5% home equity is not difficult. On the other hand, lenders look for 20% equity. More equity indicates low interest rates and low fees. High equity keeps a borrower out of the lending risk. More equity indicates that you will have less on your plate in case the home value takes a dip.
Getting an estimate of the home equity is possible when you separate the loan balance from the present market value. What you have left is the equity. You can get in touch with a local real estate agent to understand the home value. In addition, you should tidy up the home for an appraisal. If you want to improve the home structure, you need to prepare the documentation.
Shop around for Fees and Interest Rates
When you finally want to draw the line, you would want a lender offering the best rates depending on credit score, DTI ratio, and home equity. You can come across many lenders who provide customized rates using digital calculators. In addition, you can further contact banks that provide discounted loan rates. With a few lenders in mind, you can move on to calling them for estimated rates.
But the best mortgage rates are not everything – you need lenders with affordable fees. Compare the lenders’ fees and get your finances in order. Choosing a refinance lender can be difficult when you do not have thousands of dollars saved for the upcoming future.
In the end, solid credit plays a major role in getting the lowest rate and making the path easier. Of course, you need to keep an eye on the current refinance rates in Virginia for streamlining the process.