If you’re here to find the best mortgage refinance rates Massachusetts has to offer, then you’re in the right place.
Did you know that you can refinance your mortgage with any lender you choose? As your local mortgage brokers, we search for the refinancing package that works best for you.
Whether you’re looking for smaller monthly payments or you need to access a large amount of money, let us walk you through everything you need to know to make the best choice.
What’s Happening in the Housing Market?
The mortgage refinance rates Massachusetts has to offer are at historic lows right now. This could mean smaller monthly payments, should you choose to refinance your mortgage. A big reason for this rate cut is the economic impact of the pandemic. The Federal Reserve is hoping to lower rates to increase homeownership. As someone who currently owns a home (that’s you!), it’s possible to benefit from this rate cut, too!
Home Price Appreciation
Home values are staying strong. In many cases, they actually increase from where they were this time last year. Despite changes happening across the economy, homeownership continues to be steady. This means that you’re refinancing a home that’s on-track to keep its value.
Current Equity Position
Speaking of what your home’s worth, did you know that most homeowners still have about 60 percent equity in their home. That’s a lot of money on-hand, should you need to refinance due to a sudden life event or a big purchase. Steady home prices are largely to thank for this equity bright spot.
What You Need to Know Before You Refinance
Need to know what home is worth
If your home were listed today, do you know how much it would sell for on the market? What have comparable homes sold for on your street? These questions (and more) are important to answer when thinking about refinancing your mortgage.
Let’s say your mortgage is “underwater,” which means you owe more than it’s worth. In this case, refinancing would not be advisable. This is just one reason why you want to speak with a local mortgage broker who can run a report on what your home is worth.
We have access to House Canary, which is a powerhouse resource used by professionals to get an accurate report of your home’s value. This Home Value Estimator allows us to evaluate your home’s refinance potential by measuring it against comps in your area.
Before you chase down the best mortgage refinance rates Massachusetts has to offer, ask yourself whether you are:
- Seeking to lower your interest rates?
- Looking to drop your mortgage insurance?
- Switching from a fixed rate to an adjustable-rate mortgage?
- Lowering your monthly payments?
In order to refinance successfully, your local mortgage broker will have to justify your reasoning to a lender, so it’s important to discuss your situation.
Reasons to Refinance
As we’ve hinted at above, there are many reasons why you may choose to refinance your mortgage. Let’s quickly look at a few.
- I Want to Lower My Monthly Payment
This is one of the most common reasons we hear from our clients, and it makes sense! Who doesn’t want to reduce their expenses, not to mention their monthly mortgage payment. Refinancing for lower interest rates is just one of many ways you can keep your bills low.
- My Credit Score Went Up
Congratulations! If you’ve seen an improvement in your credit score, you could qualify for better mortgage terms by refinancing. Check-in with your local broker about your credit, so they can scout the best refinance package for you.
- The Fixed Period on My Adjustable Rate Mortgage Is Ending
This could mean the opportunity to freshen up your mortgage with lower rates that can reduce the size of your monthly payments. Speak with a mortgage expert who can guide you towards the best rates.
- I Want to Shorten the Term of My Mortgage
This can come into play when you’re looking to pay off your mortgage sooner. Say you want to enter a fixed-rate loan and speed up the time it takes you to close out your mortgage. Yes, you’ll reach the end of your mortgage more quickly, but your monthly payments will be higher.
Speak with a professional who can help you sort through what’s best for you.
- I Want to Take Cash Out
Maybe you need to make a big purchase or have a kid going to college. Perhaps a sudden life event is requiring you to quickly come up with a large sum of money.
You can refinance your home to borrow against its equity. You’ll get a new mortgage where you still pay what you owe, as well as what you’ve just borrowed.
- I Want to Consolidate My Debt
This works like the above-mentioned ‘cash-out’ example. In this scenario, however, the money you receive from borrowing against your home’s equity can only be used to pay off the debts you are consolidating.
Rate & Terms (or Cash Out)
Do you know the remaining balance on your mortgage? You may be able to roll it into a new loan that offers a lower rate. You may also be able to extend or shorten the loan term in a way that works best for you.
Getting Rid of Your Mortgage Insurance
What is MI, anyway?
Mortgage insurance (sometimes called PMI) helps to protect your lender from potential risks to the loan they are providing you. Most borrowers who have made a down payment of less than 20 percent will most likely need to have mortgage insurance.
When You Can Remove It
In most cases, you can remove your mortgage insurance after you have achieved 20 percent equity in your home’s value. If you have at least 80 percent equity in your home, you can ask your lender to cancel it altogether.
How can I Remove My Mortgage Insurance?
Speak with a local expert who can guide you through the best mortgage refinance rates Massachusetts has. This will be especially important when deciding whether you can remove your mortgage insurance. They can help arrange everything for you.
Qualifying for a Streamline
If you have an FHA home loan, you may qualify for a streamline refinance. Here are some of the benefits:
- No appraisal necessary
- Lower credit requirements
- Less paperwork
- Smaller closing costs
- Fewer asset and income checks
As you can see, a streamline refinance is much less difficult than other kinds. Speak with a local broker about your FHA home loan and whether this option is right for you.
What to Expect When Refinancing Your Mortgage
This is a way to dip your toe in the mortgage waters. A pre-qualification is a good initial step to mapping out your mortgage goals.
Get Your Documents In Order!
Your loan officer will guide you through this important step. Most of these can be uploaded electronically for a simpler experience.
Apply for Mortgage
This is it! The official step to opening the door and getting the keys in your hand! Your mortgage broker will ask you to sign a standard disclosure form and will guide you through all requirements.
The lender who provides you with the loan will perform this initial review. This stage helps ensure all your paperwork is together and that the process is ready to move forward.
A professional appraiser will evaluate the property you are refinancing and will appraise how much its worth. Please note that not everyone needs an appraisal. Due to the impacts of COVID-19, waivers are available in most situations.
You know the VIN number for your car? Well, a title is a lot like that. Any issue with the property will be reflected on the Title. This means the Title must be clear of all issues, such as lawsuits and tax leans.
This can get tricky, so we’ll keep it simple for you. A mortgage underwriter is responsible for assessing the risk the borrower poses. At this stage, a professional underwriter will perform a risk assessment to determine whether the borrower is authorized to receive the loan.
Approved with Conditions
It’s rare that you won’t have at least one condition in your mortgage, so don’t worry! It’s very normal, even if it’s something like an insurance binder. It’s a typical add-on. So much so that it’s quite common to see “Approved with Conditions” after this stage.
Clear to Close (Refinance)
At this stage the important application elements are resubmitted and the underwriter approves the mortgage. Congratulations, you’re cleared to close, which in this case means you’re refinancing has been approved.
Closing Day is a lot like the day you purchased the home, except you’re refinancing instead of recording the deed for immediate ownership.
Instead, your refinancing agreement goes into a waiting period for 3 days. This allows the borrower to rescind their refinancing plan, if they change their mind.
If you go through with refinancing as originally intended, be sure to speak with your mortgage broker about your first payment date, as timing can change.
When to Refinance Your Mortgage?
We offer information on a variety of mortgage refinancing rates and options. When you are ready to take the next step, contact Troy City Mortgage LLC. We can advise you on which mortgage refinancing program meets your needs.