Declining Interest Rates Offer Opportunity

Whether you own, buy or are hoping to build there may be a way to save.

Historically low-interest rates on one of the housing industries most popular types of loans means potential home buyers could lock in the best rates the market has seen in nearly two years, and millions of current homeowners could save hundreds of dollars a month through refinancing.

Just like a new mortgage, your credit score is going to play a role in whether or not you should refinance. The benchmark for getting the lowest rates possible is a credit score of 740.  A major improvement in your credit score since obtaining the original mortgage could further enhance the benefit of refinancing. Let’s say your credit score improved from a 680 to a 760—that alone could mean a significant decrease of .05- 1.0% in your interest rate.

If you’re thinking about refinancing, you’ll want to consider the loan to value ratio on your current loan. The loan to value ratio is the balance of your mortgage, divided by the value of your home. Refinancing may not be an option if your loan to value ratio isn’t at least 80%. If you are past that threshold, you may qualify for a cash-out refinance—a higher amount, low-interest loan, which would allow you to borrow against the equity you’ve built in your home. This could be a good option if you’re looking to make some home improvements, you’re looking to pay down debts, or if a loved one needs help paying for college.

If you’re thinking of building a new home, now may be a great time to talk with a lender as well. For customers in Bismarck and Fargo, First International Bank & Trust can lock in permanent financing on your new build for up to 12 months, freeing you from concern over potential market volatility while your home is under construction.

Talk with one of our loan experts today to lock in a low rate for your mortgage, or to find out how much you could save through refinancing.