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  • Is the timing right? A look into Virginia (VI) mortgage refinance rates

    Market volatility and economic changes have a direct effect on Virginia refinance mortgage rates. The Federal Reserve often moves interest rates up in a growing economy and down in a recession. The changes dictated by the Federal Reserve control the annual percentage rate (APR) associated with refinance and mortgage rates. Economic factors impact the overall housing market.


    Below is an update on where to find the best current mortgage rates in Virginia, a handful of Virginia’s mortgage companies, and the overall forecast of mortgage rates and housing trends in Virginia.


    Current market forecast in Virginia

    According to Zillow, the median home value in all of Virginia hit the lowest points in 2011 when median values were estimated around $209K. As the market turned around with the economy, housing values began rise. Zillow predicts in February of 2018, median home values will reach around $249K – a few thousand dollars up from April 2017 estimates.


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    The Mortgage Bankers Association predicts interest on a 30-year fixed rate mortgage will rise gradually over 2017, and average 4.7 percent by the fourth quarter of 2017. The National Association of Realtors has a similar prediction. The NAR anticipates 30-year mortgage rates to average 4.6 percent interest by the end of 2017.


    These estimates can be favorable for many homebuyers looking to take advantage of current mortgage rates in Virginia.


    These two forecasts can outline specific refinance timelines for borrowers. If home prices aren’t set to change too drastically between now and 2018, but interest rates are beginning to rise, refinancing sooner, rather than later could be wise.


    Depending on the last time you refinanced, or when you took out your initial loan, you might have an opportunity to lower your interest rate and monthly payments, and receive an appraisal at a much higher rate than your previous estimate.


    Virginia refinance mortgage rates VI

    All states offer different products and rates for refinancing. Virginia mortgage rates are currently set to the refinancer’s  advantage (Photo/Wikimedia Commons)


    Factors affecting Virginia refinancing interest rates for the individual

    Your personal financial situation has a major impact on what APR a lender will qualify you for. 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.


    The product you purchase.  There is a variety of refinancing products available on the market. You can select from terms as low as 3 years, up to 40 years. You can select from adjustable rates or fixed rates. Each of these programs has different fees associated with them.


    Mortgage rates in Virginia may be higher with short-term loans such as 15-year notes and become less expensive with longer terms like a 30-year option.


    A lender attempts to recoup profit by charging a higher rate for buyers who pay the loan sooner. However, if you pay a 30-year note on the same schedule as a 15-year note, you will have the advantage of lower interest rates and an accelerated payoff.


    Other ways of getting a reduction from current mortgage rates include buying points. A borrower may be able to pay down a half point to two points on a loan. While buying points will cost an additional percentage upfront, this saves thousands over the life of the loan. A half point on a $200,000 mortgage would cost $1,000 and a whole point would cost $2,000. The points paid will reduce the APR by as much, so that a 7 percent APR would become 6 percent if the borrower could pay down one point.


    Ancillary fees associated with refinancing

    The other major influence on the cost of refinancing is the cost of closing. Some loan companies offer a “no cost” option. Usually, a borrower pays thousands of dollars to cover escrow, settlement fees, title insurance, and underwriter fees. A no-cost home mortgage helps borrowers with limited finances get a new loan.


    No-cost refinancing loans can also mean the borrower can skip the appraisal process. Appraisal fees can cost around $400, which can be a burden on some homeowners. Some homeowners can have a problem refinancing if they aren’t able to prove to a lender their home is worth what they think it is, but if you and your lender are on the same page, a no-cost refinance is a wise decision.


    If you are required to pay some of these ancillary fees, you can save more money by paying the closing costs up front. This saves those costs from being folded into the amount of the mortgage or added in at a higher rate.


    Borrowing from banks or mortgage brokers

    There are a number of different products to consider before refinancing. Research the difference between a fixed rate and adjustable rate loan. Determine whether you are eligible for special rate loans like an FHA or VA loan.


    The answers to each of these questions will help you determine how to go about securing a loan.


    A mortgage broker could be a great resource. Brokers act as the “middleman” in your research efforts. By using someone who has connections to many lenders you can easily find a program that fits your financial situation and needs. It’s common for brokers to charge a small finder’s fee for assisting your search.


    Local banks are another option, though they may not offer as many refinance options as mortgage companies and specialized lenders. There are always risks with using the “little guy”, too. A small bank may carry a mortgage for a short time before selling it to a mortgage company.


    There can be advantages to using a community bank or credit union, though. Credit unions are not-for-profit entities and generally their goal is pass through the profits to the members. This goal can translate to lower fees rates on programs like refinancing products. Credit unions that service Virginia are: Virginia Credit Union, Northwest Federal Credit Union, and PenFed to name just a few.


    With enough research, Virginia homeowners can find many options in the current lending market to refinance any home.


    Mortgage calculator: Virgina rates

    The best way to paint a full picture of your refinance situation is to use a mortgage calculator. You can find calculators that allow you to determine geo-specific refinance rates. You can also use a calculator to compare your current interest and monthly payments to what you estimate you’ll be able to refinance for.


    This knowledge will allow you to compare different types of refinance programs, different loan terms, and different lenders to see what fits your situation the best.


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