According to a 2013 study from mortgage giant Freddie Mac, as many as 2 out of 5 home loan owners who were ready to refinance opted for shorter loan terms this go-around. This represents a growing trend among many refinancing homeowners — Freddie says that at 37%, it’s the highest rate for short-term refi’s they’ve seen since 1992.
So, been thinking about going for a short term refinance?
If you’ve been hesitant to pull the trigger on a home refi up until this point, you should know that now is as good a time as any to take another look at your mortgage rates, whether over the longer or short term. Another advantage to shorter-term mortgages are the waiving of certain fees under the Home Affordable Refinance Program.
You’ll want to try and lock in your current rates now, but also make sure you remember to ask for a provision for the loan to float. What this essentially means is that, not only are you protected in case the loan rates continue to climb, but you’re also afforded the opportunity to re-lock you loan at a lower rate should it continue to spiral downward.
You can also lock you rates in and pursue the mortgage application process the conventional way. If the rates should fall any lower between now and the time the refi is approved, you can then attempt to renegotiate a lower rate with your lender.
Got some refi tips of your own to share? We wanna hear them!