With incredibly low mortgage rates today, everybody’s rushing to refinance. Whether you’ve done a refi before or this will be your first, you want to know what to expect in today’s market.

It might take a while

If you’ve refinanced before, you may have been able to wrap up in 21 or 28 days. And you still might. Or it could take you a bit longer. According to The Mortgage Reports, refi’s were taking between 35 and 45 days last year, and the glut of new loans is putting a strain on the system, thereby causing delays. 

Rates may fluctuate

Rates as of this moment we are at historic lows. Could they go lower? It’s possible. Could they rise? That’s also within the realm of possibility. Talk to your lender about when and if you should lock your rate.

“A lock-in or rate lock on a mortgage loan means that your interest rate won’t change between the offer and closing, as long as you close within the specified time frame and there are no changes to your application,” said the Consumer Finance Protection Bureau (CFPB). “Mortgage interest rates can change daily, sometimes hourly. If your interest rate is locked, your rate won’t change between when you get the rate lock and closing, as long as you close within the specified time frame and there are no changes to your application. Rate locks are typically available for 30, 45, or 60 days, and sometimes longer. If your rate is not locked, it can change at any time.”

You might not get the lowest rate 

Those sub-3% rates you’re hearing about may not be available to you. They’re reserved for those with the best credit. If you don’t have at least a 700 score, don’t expect to get that kind of rate without a buy down.

You might need an appraisal

Then again, you might not. It all depends on the type of loan you’re getting. If you’re refinancing from one FHA loan to another, you’ll probably only need an exterior appraisal. In this case, an appraiser will come and measure and take pictures of the outside of your home only. 

But, if you’re refinancing out of an FHA loan into a conventional loan, for example, you can expect to have an appraiser td a thorough examination of the interior of your home, too. If you’re doing a streamline refi, you likely won’t need an appraisal at all.

You might get money back

Doing a cash-out refi isn’t the only way to get some money out of your home. Talk to your lender about when to close so you get some money back. With our recent refinance, we closed at the end of the month and were able to skip two payments. We also had our existing escrow account credited back to us. That was about an $8000 swing.

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