Mortgage rates hit new lows and applications to refinance fell for the third straight week. It defies logic, unless of course you operate in today's tight mortgage market. Why Millions of Americans Still Can't Refinance Their Mortgage

If you have built up a lot of equity in your home, interest rates are low, and you have good credit, it may be a good idea for you to refinance. If you do not have very much equity built up (less than 10%), you may be charged extra to make up for not having sufficient equity. You will also want to check into where the current interest rate is since you obviously will not want to refinance to a higher interest rate. If interest rates are expected to drop even more in the near future, it may be wise to wait until interest rates have dropped as low as you think they will drop. To make refinancing worth, it, it is wise to refinance when the current interest rates are at least 2% lower than your current interest rate.
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An interest rate that is at least 2% lower will save you a sufficient amount of money despite the high expense paid to refinance.
If you are not paying the thousands it cost to refinance, chances are that you are making up for that in higher interest rates. To get the lowest interest rate possible when refinancing, you, of course, need to have a decently good credit score as well (around 678 or higher). It is also a good idea, when thinking about refinancing, to make sure all your payments are up to date and you do not have any outstanding payments or late fees that need to be paid.Â
If you, however, do not have much equity in your home, you are almost done paying off your loan, or your property value has gone down, you may not want to refinance. You will also probably want to hold off on refinancing if your credit score has gone down. It is therefore important to check your credit score to be certain that you have a good score.
It also couldn't hurt to take the time to improve your credit score from good to very good or excellent if you have the time. If interest rates are very low, however, and your credit score is good enough, you may want to refinance right away.Â
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