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Now is the Best Time to Refinance Your Mortgage

By: Aahoo Pourang , Rates are at historic lows which have been causing a huge boom in refinancing. If you’re a homeowner with a monthly mortgage payment and you’ve been thinking about refinancing your mortgage, the best time to do it is now. According to, the national average is about 3 percent, and with that sort of interest rate yielding a more affordable monthly payment, there has never been a better time to refinance.

However, the most convincing reason to start refinancing is because of the announcement the Federal Housing Finance Agency (FHFA) made end of August. Originally, they were to charge a .5 percent fee on new refinancings that would take effect beginning of September, but they decided to push the fee to December 1 instead.

Homeowners considering refinancing their mortgage must take advantage of the lowest rates on their mortgage, in addition to not having to pay the fee. To calculate what a .5 percent fee looks like, say you’re taking a $400,000 loan on your home. The fee would total to $2,000. Refinance now, and that fee won’t exist.

In addition, the rates are the lowest anyone has ever seen, and most lenders give themselves a good 45-day window to close, so the next six weeks is crucial to avoid that .5% market fee. Because of the coronavirus pandemic, there’s been so much uncertainty in monthly income, and refinancing can give homeowners greater security in a lower monthly payment.

The FHFA announced that any loans under $125,000 would be exempt from the fee, but for all other mortgage refinances, it can be rolled into monthly charges and paid over the life of the loan. Keep in mind that as December 1 draws closer, interest rates will go up. You will still most likely benefit from incredibly low rates after December 1, but if your loan is above $125,000, it is best to lock in your rate within the next two months.

As the economy slowly begins to recover from the beginning of 2020 and the start of the coronavirus pandemic, rates might move slightly higher. But according to Bankrate’s chief financial analyst Greg McBride, CFA, it’s going to be a long road back with plenty of stops. Buyer’s should expect rates to remain very low for several months. Economists are expecting rates past September to be around 3.2 to 3.3 percent, stating that the biggest risk to interests rates is higher inflation.

Given the uncertain times, if homeowner’s have a down payment and want financial security, committing to a mortgage or refinance is ideal this September and October.