So you want to refinance, but mortgage rates are rising. Don’t worry, you haven’t missed the boat on your refi opportunity. Mortgage rates are still historically low, and they aren’t expected to exceed 5% in 2017, according to many economists and mortgage analysts.
Here are eight tips to help you successfully refinance your mortgage as rates rise.
1. Make your move fast
Even though rates aren’t expected to shoot through the roof this year, they’ll likely stay on a steady, upward trajectory. “If you’re thinking about refinancing, now probably is the time to do it,” says Lauren Lyons Cole, a certified financial planner and money editor at Consumer Reports, adding that rates are probably not going to be lower than they are right now. It’s worth doing your research to see what rate you can get and then acting swiftly before it’s too late.
2. Prepare in case rates drop
You’ll want to get your refinance application in as soon as possible, not only to catch low rates before they rise, but also to avoid a backup in refinance applications should rates suddenly fall, according to Casey Fleming, author of “The Loan Guide: How to Get the Best Possible Mortgage.”
“This is the biggest mistake I think people make,” Fleming says. “If you’re not in the pipeline ready to go when the interest rates start moving down, all of a sudden you have to get in the back of the line, and oftentimes you miss the dip in the rates.”
Fleming says that you’re not obligated to lock in a rate when you submit your application. You can wait and watch the market for as long as you want. If you’re not ready to submit your application just yet, work on keeping your credit score up, have your financial documents ready to go, and save money for the upfront refinancing fees. Just remember that rates are rising slowly but steadily.
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