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  • At a glance: Massachusetts (MA) refinancing mortgage rates and programs

    Market fluctuations and interest rate adjustments by the Federal Reserve are driving forces behind homeowners ability to refinance their homes.Currently the stars are aligning. Massachusetts (MA) refinancing rates and current market values are creating the perfect combination for homeowners to refinance. Borrowers with good credit rating and solid work history will get the best mortgage rates in Mass. However, anyone paying down a note on a home may qualify for good refinance mortgage rates.


    Read on to learn more about Massachusetts refinance rates, mortgage companies you might consider for refinancing, and the mortgage forecast in Massachusetts up to 2018.


    Current market forecast in Massachusetts

    When Massachusetts’ housing market hit rock bottom in 2012, the median value for a home was only $283,000 – a significant plunge from historic values. The economy and housing marketing in Massachusetts has seen exceptional growth over the last five years. Zillow predicts the growth to continue. Massachusetts’ median housing price has potential to reach $376,000 by 2018. While not incredibly drastic, the increase of value would be growth from the 2017 median housing rates which are predicted at $368,000.


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    Concurrently, two major real estate associations predict a rise in interest rates for refinancing over 2017. By the end of this year, The Mortgage Bankers Association predicts interest on a 30-year fixed rate mortgage to average 4.7 percent and the National Association of Realtors anticipates 30-year mortgage rates to average 4.6 percent.


    These two forecasts will mean different things for different borrowers. While home values are scheduled to increase, so are interest rates. This poses a few questions to the borrower. Should you act before mortgage rates increase, or wait until your home reaches a potentially higher value?


    Depending on the last time you refinanced, or when you took out your initial loan,one might be able to save on the monthly mortgage payment by obtaining a reduced APR. Before the housing dip in 2012, mortgage rates could reach 8 percent. If you are a homeowner carrying a high APR, and your goal is to find the best mortgage rate in Massachusetts, this might be an incentive to refinance quickly.


    On the other hand, if you think your home has increased in value, waiting to receive an appraisal in 2018 might enhance the refinancing products you’re eligible for. Better rates apply to mortgages serving only 80 percent or less of the appraised value.


    massachusetts refinance mortgage rates MA

    The housing market and MA refi rates are concurrently rising, which makes refinancing an important conversation to start (Photo/Wikipedia)


    Factors affecting Massachusetts refinancing rates

    With a solid payment history and good credit, you may be eligible for the best refinance mortgage rates in Massachusetts.


    One can usually save more money by getting a 15 or 20-year refinance mortgage. Shorter mortgages benefit buyers by getting them debt-free quickly. Since mortgage companies offer the lowest APR for long-term loans, a buyer can save most by taking a long-term note and paying it down quickly. Keep in mind, the shorter a loan, the a higher the APR might be.


    Buying down points can also help a borrower save. Some lenders will offer a buyer the opportunity to buy down a half point, whole point, or even two points of the interest rate. Buying a whole point would reduce a note from 6 percent APR to 5 percent APR. A point being 1 percent of the loan value makes an $80,000 mortgage cost $800 per point. This saves thousands over the life of the loan.


    It’s important to learn the differences between the numerous refinancing products on the market, before making a decision. Do you know the difference between a  fixed rate and adjustable rate loan? Are you eligible for special rate loans like an FHA or VA loan?


    Other refinancing costs borrowers should consider

    Often a borrower will face fees over the course of the refinance process. Some of these fees are in your hands, others may not be. Fees that are dictated by lenders include: underwriter fees, appraisals, escrow, and more. To bypass these fees, consider a no-cost refinancing loan. This type of refinance option could at the least lessen the impact of these fees.


    There are also fees you could eliminate with better financial planning. Bad credit forces many borrowers to pay a higher interest rate and larger down payments. Those with the best credit ratings will qualify for the lowest rates and the best products. You might also be switching to a loan that requires PMI if you haven’t budgeted correctly. If you can’t find a lender to forgo this extra cost, consider getting an appraisal to prove your loan to value ratio is low enough to skip PMI.


    Borrowing from banks or mortgage brokers

    One of the most common places to search for refinancing products are regional banks. Chase Bank and Wells Fargo are only two examples of regional banks that assist borrowers in the refinancing process. Wells Fargo offers a program for existing customers to help streamline the loan process, too. If you currently bank with a larger institution, it’s wise to check their products out first.


    Local banks or credit unions also competitive products – these organizations can often offer lower fees rates. Credit unions that service Massachusetts are RTN Federal Credit Union, DCU and Mass Bay Credit Union, to name a few.  


    If you don’t have the time or focus to properly research your options, a mortgage broker could be a great resource. Brokers charge a small fee for their services, but have many connections in the lending world. By using someone who has connections to many refinancing options you can easily find a program that fits your financial situation and needs.


    Last tip for refinancing in Massachusetts:

    Use a Massachusetts mortgage calculator. Apart from speaking with a lending representative directly, lending calculators are the best way to fully detail what you can expect from new refinancing rates. Calculators allow you to input your current interest and monthly payments and compare your terms to other products available to you.


    It’s always important to compare different types of refinance programs, different loan terms, and different lenders to see what fits your situation the best. Speaking with a professional can eliminate any questions you have about the process, too.


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