Back to All Posts

Is *Now* a Good Time to Refinance?

Aug 25th, 2020 • Gayle E.

It’s not too late

Mortgage rates are at an all time low and even though the economy has been ravaged by COVID-19, the future for refinancing continues to look bright. If you’ve been thinking about refinancing but haven’t yet, it’s not too late. 

Interest rates are at record lows and forecasted to stay here for some time. According to TheMortgageReports.com, “a survey of major housing authorities such as Fannie Mae, Freddie Mac, and the Mortgage Bankers Association, the 30-year fixed rate mortgage will average around 3.18% through 2020.” Realtor.com predicts that mortgage rates will remain low and may go below 3% by the end of the year.

Why Your Credit Score Matters

Credit scores weigh heavily on the rate that will be available to borrowers. MyFico.com reports that the national average rate for a 30-year, $300,000 mortgage for applicants with a credit score between 660-679 is 3.642%. Applicants with higher scores of 760-850, on the other hand, have an average rate of 3.029%. This would be a difference of $101/month in the mortgage payment, or over $36,000 over the life of the loan!

Improving your credit score is an important step to take before applying for refinancing. Luckily, we have a blog post from our corporate wellness arm that covers how to improve your credit score in great detail. Depending on what’s in your credit report, you may or may not be able to quickly improve your score, but it’s definitely worth looking at. 

The good news is that rates are very low and expected to stay there for some time, but expect some fluctuations. If you can improve your credit score prior to applying for your new financing, by all means, please do. However, this could be a golden opportunity for you to put yourself in a better position financially for the long term. Make sure you take advantage of it. 

Want more great tips and help like this? You can talk directly to Gayle yourself with a Hey Money subscription! We’ve kept rates as low as possible, just $19.99 a month, so that everyone can have the opportunity to get the financial guidance of a true expert. Learn more here!

Sign up for email updates