Once you purchase a home, your home ownership finances don’t have to be set in stone. As time goes on, you may want to explore your options for refinancing. Getting a lower mortgage rate can save you money in both the short and long-term.
The ideal time to refinance your mortgage could be now, as the Federal Reserve recently dropped its benchmark interest rate by 50 basis points to a range of 4.75% to 5%. This is the first drop in four years, signaling a positive turning point in the housing market.
When a homeowner is considering refinancing, in order to be worth it, the rate reduction must save the mortgage holder enough money to make refinancing truly valuable for them. Right now, 40% of mortgages taken out in 2023 and 2024 can meet this requirement.
According to the Summary of Economic Projections, experts predict that the rate will continue to decrease through the end of this year and into next year. Many expect to see a target range below 3.5% by the end of 2025.
Refinancing could help you save money by reducing your monthly payments. Or, it could allow you to pay off your mortgage more quickly with shorter terms. No matter the potential outcome, you can only benefit from checking up on your mortgage health and exploring new terms that could work better for you.
Your lender can help you understand what these changes might mean for your mortgage and how you could benefit. Now’s the time to connect with them to discuss your options and take the next step in your home ownership journey.