Second Chance Denial: Today’s Low Fares Offer Hope to Previously Rejected Applicants



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Mortgage rates have been below 3% for a month now.

Last week, the 30-year average fixed mortgage rate fell from 0.02% to 2.94%, according to Freddie Mac. We’ve only seen slight weekly variations in mortgage rates this month, which is good news as current mortgage and refinance rates are extremely low.

Right now, it doesn’t look like rates are ready for a big move in either direction. “What could really end up happening is nothing over the next couple of months,” said Les Parker, managing director of Transformational Mortgage Solutions, based in Jacksonville, Fla. The reason is counterbalanced factors. Recent reports show an increase in inflation, which would normally push rates up. But the Federal Reserve believes this is only temporary and wants to see low rates for the foreseeable future.

As the economy begins to reopen and many of those who lost their jobs can return to work, the current low rates present an opportunity for homeowners who missed the refinancing frenzy of the past year. “If you’re in the same industry … and you’ve been out of work for a while, especially with the pandemic, lenders tend to … be a lot nicer,” says Jeff Lazerson, president of the Southern California mortgage company. Grader.

Most lenders were overwhelmed last year as historically low rates spurred demand for refinancing and new home loans. In response, they have become more selective and have tightened their lending standards. But now these same lenders are competing for business.

If you are unable to get a loan because you have a unique or complicated situation, such as business income or credit problems, “all of these people should go back to lenders now because there is chances are these same lenders will approve them. today even though they told them no last year, ”Lazerson says.

This is good news for those who weren’t able to refinance their mortgage last year and are still looking to take advantage of low rates to save money.

How to decide when to refinance at a lower rate

Choosing to refinance your mortgage saves money.

But it’s only worth it if you can get a significantly better rate than you currently have. “I think people should improve their interest rate by 75 to 100 basis points [0.75% to 1%] to make economic sense, ”Parker says. But being able to lock in a lower interest rate is only the first step in deciding whether it makes sense to refinance – you need to factor in closing costs as well.

Even if you use a no closing cost refinance loan so you don’t have to pay the costs out of pocket, you still pay them, usually by adding them to your loan balance. Depending on the length of time the loan is retained, these upfront costs may outweigh your savings. So you have to do the math first.

So before you sign the dotted line, make sure the lower rate and fees are worth it.


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