Afraid to re-fi? It isn’t sci-fi. It’s both easy and good for your bottom line.

The time is ripe to refinance your home. Perhaps the days of record low interest rates are gone, but the current rates are still attractive, which means you should act on them as soon as possible while the getting is good.

Aside from potentially saving thousands of dollars for swapping your current rate for a lower one, there are other reasons to contact your trusted mortgage lender and potentially refinance your home ASAP.

Reason 1- Rates won’t be this low for much longer.

Although we don’t know exactly what the future holds, we do know that interest rates are slowly climbing up, and that economists and lenders are constantly warning us of increasing rates. So, we can safely say that it’s the right climate for you to make this financial jump.

By working with a lender,and using a mortgage calculator, you can find out exactly how much you can save each month, or over the lifetime of the loan with a lower interest rate. Still aren’t sure? If your interest rate is 1% above the current rate, refinancing might be the best move.

What does refinancing actually look like, exactly?

“Suppose you have a 30-year fixed rate mortgage loan for $200,000. Currently, you have a 6.5% interest rate (fixed), and your beginning of month payment is $1,257. Now, rates are at 5.5% interest (fixed), this could reduce your monthly payment down to $1,130. This would be a monthly savings of $127, or $1,524 annually.” – Investopedia

 

How do you find out about the most up-to-date mortgage rates? Right here.

And how do you calculate your mortgage rate? Here is a simple tool (be sure to type in your zip code first).

Reason 2- Take advantage of your home’s value and equity.

Home values have made a huge comeback since the 2008 recession. Naturally, the market tightens up when everyone is trying to buy before interest rates rise. This in turn increases the value of your home (aka great news if you are considering refinancing). Here are some more reasons you should take advantage of your home’s value and equity:

— If your house is appraised for more than when you initially purchased it, you may qualify to have your Private Mortgage Insurance (PMI) removed quicker than anticipated due to the higher valuation. That could save you hundreds of dollars each month, depending on how much your initial loan was. Exciting, right? (I was talking to your bank account).

— You may have have better options and terms for a loan on a house with a higher appraised value and lower mortgage balance. Lower risk means more options.

— Refinancing your home allows you to take the cash out of your home in order to pay down debt or invest in renovations (which adds value to your home), college, a business, another property, or pay for a wedding. The possibilities are endless! And refinancing is much smarter than applying for another loan at a higher rate, or even using a credit card.

An example: “Your home is worth $300,000, and you owe $150,000. If you divide 150,000 by 300,000 you get 0.50, which means you have a 50% loan-to-value ratio. A lender that allows a combined loan-to-value ratio of 80% would grant you a 30% home equity loan or line of credit, for $90,000.” –Nerdwallet

 

With that said, don’t rely upon the continued increase in home values. This is prime-time, and once interest rates get even higher, buyers will naturally slow down. No one wants to have 20/20 hindsight on missing this great opportunity.

Reason 3- You are a more worthy borrower.

You may be making more money today than you were when you initially purchased your home, or since the recession. This could potentially mean your credit score is also higher, in turn making you an even better candidate for refinancing.

According to myFICO, mortgage rates can fluctuate as much as 1.6% depending on your current credit score, which could save you hundreds of dollars. Pat yourself on your back and your wallet.

Here are different ways to check your credit score for free.

Reason 4- Mortgage credit is hot and available right now.

According to The Mortgage Reports, “more mortgage loans are being approved than during any period in recent history. If you’ve been recently turned down for a mortgage, it’s time to re-apply.”

This means credit is more available for homeowners. According to the Mortgage Banker’s Association (MBA)’s Mortgage Credit Availability Index (MCAI), mortgage credit has increased by .7% in just the past month (80% since 2010!), continuing an upward trend.

This means more lenders and banks are approving loans than ever before. We are talking 77% of purchase loan applications making it to closing. For new homeowners trying to refinance, or for those who have tried in the past, now is the time to submit or resubmit an application.

Reason 5- You want to pay off your mortgage more quickly or get a fixed rate loan.

If you want to change up the type of home loan you have, or pay off your mortgage more quickly, here are some options:

Refinancing at a lower rate. As previously noted, by refinancing at a lower rate, you have the option of making smaller monthly payments over the same amount of time, leaving you with extra money in your pocket each month.

Shorter-term mortgage. If you are currently paying towards a longer-term mortgage, you can reduce your loan term lifetime, pay it off faster and save money in the long term by paying the same amount with a lower rate.

Fixed-rate mortgage. If you currently have an adjustable rate mortgage, you have a chance to refinance at a fixed-rate. This way, you can lock down a low rate without risking the rates moving on to higher places in the future.

Regardless of whether you want more money in your pocket, want to change your loan, or pay off your mortgage quickly, you should strongly consider refinancing while the price is still hot. It’s not difficult or complicated, and a knowledgeable mortgage lender can help you every step of the way.