If you're a homeowner or if you're just savvy with finances, you may have heard mention of something called a refi boomlet. If you're not familiar with this term, you'll want to find out what it is and how you can benefit.
In fact, we're in a boomlet right now, but it won't last long. Knowing the ways that you can take advantage of the refi boomlet can save you thousands of dollars over time, and may even make it possible for you to purchase a newer or more valuable home. Here's what you need to know.
What's a Refi Boomlet?
A refi boomlet is a period of time when the markets enjoy particularly low interest rates. During a refi boomlet, mortgage applications increase, and more homeowners seek to refinance their existing mortgage at a lower interest rate. Some refi boomlets last a long time, others only for a short while, depending on factors affecting the market that cause changes to interest rates.
Refi boomlets are an excellent opportunity for homeowners to reduce their monthly expenses, thereby saving money, reducing their debt-to-income ratio, and generally improving their quality of life.
What Causes a Refi Boomlet?
The ten-year Treasury Bond and 30-year mortgages are directly tied to one another. When the market price of US Treasuries goes up, which lowers the interest rate, then mortgage interest rates typically also decline. And when mortgage interest rates go down, homeowners with mortgages at higher interest rates can refinance and often save substantial amounts in interest payments.
What Do You Need to Know About this Boomlet?
At the moment, the market is enjoying a boom because interest rates have been continuing to fall, especially since April of 2019. This boom is going to be relatively short, so they're calling it a boomlet. Experts are saying that the boomlet will be over before you know it. This is the moment to step up and refinance your mortgage.
Can You Capitalize on Upcoming Refi Boomlets?
Refinancing during a boomlet lowers your cost of borrowing. This frees up capital to help you save money for a larger home or remodel your current home.
How Can You Tell if a Refi Is for You?
You could benefit from a refi if your current interest rate is substantially higher than current market rates. Talk to a lender to compare interest rates and to determine if it's worthwhile to refinance your home.
If you would like to capitalize on upcoming refi boomlets, it's important to be in a good place financially and to have your documentation ready. Start by checking your credit report for errors and have any errors corrected. Your credit score should be as high as possible, affording you the best possible interest rates.
When you apply for a loan, the lender will ask about your financial situation. Your lender may ask to see your tax documents, pay stubs, mortgage statements, business tax returns, W-2s, and bank statements. Have this paperwork ready to give to your lender in advance. This will streamline the process, which can take up to two months. Keep in mind that your lender may require you to get an appraisal before the refi can be finalized.
Figure will soon be offering a mortgage refi product that will offer homeowners a much faster, mostly online process with much less paperwork. Check at figure.com to see if the service is live!
When Should You Take Advantage of a Refi Boomlet?
When a refi boomlet occurs, many homeowners wait until the last minute, hoping that interest rates will continue to drop. The current boomlet is not expected to last long, so if you're in a position to refinance your home, now is the time to do so. Talk to your lender about making this happen.
If a mortgage refi is not appropriate for you, we also provide a hassle-free home equity line of credit for homeowners who have equity in their home. Whether you're trying to remodel your house or make home repairs, our home equity line of credit is an excellent option for homeowners seeking a fixed-rate, low-interest loan. Our online application process takes just minutes, and if you're approved, money could be in your account in as little as 5 days2. Check out our website to find out more.