There is no doubt that the interest rates have risen by a lot recently, and they are expected to continue their ascent for the foreseeable future. Now this makes a lot of people quite afraid to refinance their existing loans. However there are some steps that you can take to cope with this current situation.
If you have a VA Loan can you refinance – Yes, the VA Home Loan Guaranties provides veterans refinancing for:
- Refinance an existing VA home loan.
- Refinance an existing VA loan to reduce the interest rate.
- Refinance a manufactured VA home loan to acquire a lot.
- Refinance an existing home to make energy efficient improvements up to $6000.
- Refinance an existing home to reduce the term of your loan from 30 years to 15 years.
Here are some effective tips to secure good rates on your VA refinance:
One thing that will prevent you from refinancing successfully is panicking. Interest rates are very erratic as they follow the quirks of the market. Indeed it is true that mortgage rates grow faster than they fall, sudden jumps can easily be erased in the following week.
Currently, the rate for a 30-year VA fixed mortgage loan has gone up to around 4.5% from around 3.75%, but it still much lower than the historical rates. A small percentage increase will just be a matter of a few tens of dollars a month, which probably would not hurt. So go ahead and refinance and do not panic.
Be Prepared To Close Faster
Little do people know that VA lenders do offer different commitment periods that may vary from 30 days to as long as 60 days or even much longer. Commitment period is basically the time allotted by the lender for you to close the loan; this is usually quoted by lenders as 45 days. However, if you have the complete paperwork at hand, and you have a good credit record, you could shorten this commitment period and close the loan within just 30 days.
Shortening your commitment period on your VA refinance can be of great benefit to you because lenders usually would provide you with a reward for closing the loan faster than expected. And rewards usually come in the form of slightly lowered interest rates. While during normal circumstances the rate decrease is not significant, it may matter much during these times when the rates are rising steadily.
Try getting your second mortgage from other lenders
You do not have to get stuck with the same financial institution for your refinancing. You can find other lenders, perhaps a credit or thrift union, or even a local back that may offer very attractive rates for Home Equity Loans despite the rising rates in the market.
Get a longer term for your refinancing
If the rising rates make your monthly payments unaffordable, then you may consider getting longer terms for your refinancing. Longer terms would mean that your monthly fees would be lower even though the interest rates have risen.
You must be careful however when deciding to get longer terms for your refinancing. Ultimately you would end up paying more than you would with a shorter term, but if that is the only way you could afford to pay for your refinancing monthly dues, then that might be your only option.
The rising rates in today’s mortgage market should not hinder totally hinder you from refinancing with a VA lender. Rising rates is but another normal aspect of the market which you could surpass in time.
If you know you what to do, you could cope with these hard times. Even if the rates are rising, you can still refinance. Getting a refinance quote is easy and free, click here to get one now.