Mortgage rates are down and you’re not going to bother trying to sell your home anytime soon. Should you spend the money to refinance and lower your payments? Certainly, a lot of people think they should refinance.
•Even if you don’t need private mortgage insurance now, you may need it in a new mortgage because falling home values are weakening some equity positions below the 20 percent threshold.
In a depreciating market, they just haven’t amassed enough equity and may find the rate they qualify for is, in fact, higher than the current rate, lenders say.
“Credit scoring has become such a huge deal with the rates [consumers] can get,” said Steve Molitor, vice president of PHH Home Loans, Evanston. Molitor recently had a customer refinancing his home with a very respectable credit score of 739, and found that his rate inched up ¼ percentage point because his score was not 740.
Lenders also advise customers to consider refinancing their adjustable-rate mortgages into conventional, fixed-rate products since rates have dropped.
Mortgage bankers also recommend that consumers shop for a lender, starting first with the company that holds the current mortgage.