Interest Rates Stay Low and Sooner Partners Reviews Say Refinance Could Be Possible

The Federal Reserve has interest rates at an all-time low in an attempt to help stimulate the economy this year, and there’s no sign of them going back up anytime soon. So, this could be the perfect time to refinance your home for a lower rate on your loan or access the equity to pay off some bills.

But refinancing isn’t for everyone, and you don’t want to make a wrong financial move, especially in this unpredictable year. Before you jump into a refinance to grab that low rate while it’s still here, you need to look at your current circumstances and ask yourself if a refinance is the right move for you.

Should You Refinance?

What is your goal with a mortgage refinance? Refinancing your mortgage and lowering your monthly payments might sound enticing, but taking out a new loan has its costs. Just like your original loan, there are closing costs you have to pay, so you need to be sure you’ll recoup the expense. If you plan to remain in your house for at least a few years, the cost of refinancing might be worth the outlay. 

But if you want to move soon, not only will you not recover the cost of the refinancing, but you’ll also pay closing costs when you sell your home. That’s like paying double the amount when you could’ve just paid once, and that is a strain on your wealth that you don’t need.

Check Your Credit Score

Before you consider a refinance, you want to make sure you know your credit score because a refinance is a new loan, and you’ll have to qualify. You can check a quick service like Credit Karma to find out the score itself, but if you want to know what’s on your actual credit report, you want to request the full breakdown from each of the main credit bureaus.

You can pull your credit report from the big three: TransUnion, Experian, and Equifax once every 12 months without penalty by law. That way, you can find out your credit score while also making sure everything on your reports belongs there and you can dispute what doesn’t belong.

Adjusting Your Budget

Once you’re sure you’re ready to refinance, take a look at your budget so you can see what banks will consider when you apply. Typically, they don’t want to see a lot of debt in your name because that means you might not have the ability to make your mortgage payments. If the pandemic had you partially living on credit cards, you’d want to eliminate that debt as quickly as possible.

One way to do that is to take out a debt consolidation loan and move all your credit card balances into it. Sooner Partners can’t get rid of your credit card debt, but they can offer a debt consolidation so you can make one payment per month. With the extra money you save paying one bill instead of several, you could use the extra cash to pay off your debt faster or save for closing costs on your refinance.

The goal is to have a laser-like focus on eliminating as much debt from your budget as possible so your lender will see you as less of a risk and give you a refinancing loan.

Moving Toward a Brighter Future

The Federal Reserve probably won’t raise rates anytime soon, which means you have time to refinance your mortgage. It also means you have some time to straighten your portfolio in such a way that you’ll be more attractive to the banks, and they won’t think twice about loaning you money. But the Fed takes its cues from the market, so while rates might stay low, there’s no guarantee how long it will last. So, the sooner you get your finances in order, the better your chances of lowering your monthly mortgage payment with a refinancing loan.