Does refinancing a mortgage loan in Washington State makes sense, going into 2018? A lot of homeowners seem to think so. A recent survey showed an increase in mortgage refinance activity in Washington and across the nation. Many homeowners are benefiting from low mortgage rates and higher equity levels. But is refinancing right for you?
Washington and U.S. Refinances Climb, Going Into 2018
On December 20, the Mortgage Bankers Association (MBA) published its latest weekly survey of loan applications nationwide. This long-running survey provides valuable insight into various mortgage financing trends, including interest rates and loan volumes.
The MBA’s latest survey showed that the refinance share of overall loan activity increased to 53.9% of total applications. That’s the highest level it has been since December 2016, and an increase over the previous week’s percentage.
What this shows us is that, going into 2018, more homeowners in Washington and across the country are refinancing their existing mortgage loans. But why? There are a couple of reasons for this upward trend.
Low rates: One reason for this uptick is that mortgage rates have been hovering near historical lows for the last few months. According to the weekly industry survey conducted by Freddie Mac, the average rate for a 30-year fixed mortgage loan was 3.94% during the week of December 22, 2017. Thirty-year rates have been hovering below 4%, on average, for many weeks now. But recent forecasts suggest they could rise gradually in the months ahead. Perhaps that’s why we are seeing a higher number of mortgage refinances in Washington, as of late.
More equity: There’s another reason why it might make sense to refinance a home in Washington in early 2018. House values across the state have risen steadily and significantly over the last couple of years. In fact, Washington has posted the biggest year-over-year price gains of any state in the country. This means that homeowners are enjoying higher levels of equity, which could put them in a good position to refinance their existing mortgages.
These two factors combined – relatively low mortgage rates and steadily rising home values – could make it a good time to refinance your home in Washington.
Could You Benefit from Refinancing Your Mortgage?
Is 2018 a good time to refinance your home in Washington? That depends on your financial goals, your current equity situation, and the rate you have on your existing mortgage loan. By evaluating these three factors, you can determine if it makes sense to refinance into a new home loan.
People use mortgage refinancing to accomplish different goals. Some do it to convert equity into cash, while others do it to reduce their monthly payments. Most people fall into the latter category. They do it to secure a lower mortgage rate on the new loan and thereby reduce the size of the monthly payments.
This is where the “break-even point” comes in to the picture. This is the point at which the money you save (by reducing your rate) begins to exceed the amount you pay in closing costs for the new loan. We can help you determine the potential for long-term savings by evaluating your current mortgage situation, along with the rate you qualify for. Please contact our staff with any questions you have, or to receive a rate quote.