LOS ANGELES (CBSLA.com) — With Thanksgiving meals to plan and Black Friday sales to research, real estate experts say consumers should consider adding yet another item to their plates – refinancing their homes.
“Now would probably be a good time to refinance,” says Professor Stuart Gabriel, director of the Ziman Center for Real Estate at UCLA. He says consumers can expect to start seeing slight rate hikes over the next couple of months.
“There is some tension on the part of the Federal Reserve to normalize rates and to bring those rates up as soon as they see enough firmness in the U.S. economy.
Anyone willing to jump into a refi should consider Gabriel’s guide for a real deal.
First – comparison shop interest rates. Consider checking out the Mortgage Brokers Association of America, among other websites.
“A great thing to do is hop on the Internet and take a look at the interest rate charts,” Gabriel said. “You can do that by simply Googling the 10-year treasury or the fixed-rate mortgage interest rate or any number of interest rates.”
For example, the current rate for a 30-year fixed mortgage is 3.85 percent. If your current rate is less than 2 percent, then a refi just doesn’t make sense. But if your rate is 4 points and above, then keep an eye out for a better rate.
Second – figure out what type of refi is needed. A shorter 10- or 15-year mortgage will cost more than a typical 30-year fixed rate.
Most importantly, homeowners should be familiar with their numbers, like FICO scores, credit records and the value of their property. Consumers should know how much debt they want to carry, because all those factors come into play when refinancing.
After all that research, Gabriel says the third point of his real deal guide is to find the right lender.
“You want to look for a lender with whom you have some common language,” Gabriel said. “You want to look for a lender that can explain the terms of the loan in a straightforward manner, a lender that will explain the qualification process to you, and a lender who you deem is honest and is looking out for your best interest and not in somebody else’s interest.”