Refinancing Right Now Might Make Sense. Here’s Why.
Refinance before the new fee hits on October 1st and have the Federal Reserve help pay your mortgage for you. The Federal Housing Finance Agency (FHFA) is imposing a 0.5% fee for all mortgage refinancing on October 1, 2020, so on a $400,000 loan, you will pay an extra $2,000 in closing costs. When you take this into account, rates may never be this low again.
You may have heard that, as one of the few upsides of the COVID-19 pandemic, conforming mortgages are at all-time lows; so low that even though my family refinanced less than a year ago, it is worth us refinancing again – and that may well be the case for you, too. (Note: We have a conforming loan. Jumbo rates are not necessarily so competitive.) Our current 15-year loan was only charging 3.125% but we are refinancing to a 30-year loan and still getting a lower rate. We wanted to pay off our mortgage more quickly, but it was too hard to pass up 2.375% on a 30- year mortgage. At this rate, the government will likely be helping to pay off our mortgage for us. I’ll explain how this works later.