Historically low interest rates are creating a wave of refinancing efforts from homeowners. The average rate on a traditional 30 year fixed mortgage is somewhere around 8%, so the fact that it’s now possible to find rates at or even below 5% from some lenders is very significant. There are millions of Americans with mortgages that should be taking advantage of the opportunity to refinance at these low rates if they qualify. There are some important tips that you should keep in mind if you are thinking of refinancing.

First, be patient. The past few years have been a difficult time for mortgage brokers, and they finally have something positive that they can call their clients about with these low rates. They are desperate to get their businesses rolling again, but you don’t have to be desperate to sign the paperwork and refinance at the first opportunity. This is a major financial decision, one that you shouldn’t take lightly.

Your mortgage broker will make it sound like interest rates could jump back up at anytime, and they would be correct-no one knows what direction rates will move in from day to day or even from hour to hour. The consensus opinion among economists though is that these low rates are probably here to stay for a while.

The Chief Economist for Fannie Mae recently said that his full year outlook for rates on a 30 year fixed mortgage is between 4.8% and 5%, so you should have a chance to refinance even if you take your time to make a decision.

Second, shop around. You have many options as a borrower and not all mortgages are created equal. Find a lender that you trust and make sure you understand all of the details of the loan you’re agreeing to.

Finally, get prepared now so that when an opportunity to refinance that you’re satisfied with presents itself, you’re in a position to act. Keep paperwork like bank and brokerage statements, mortgage statements, tax documents, and pay stubs together so that the lender has all of the pertinent information to qualify you for the loan you want.

Remember that although credit is beginning to flow again, it will take time before the whole financial system is healthy again. Your chances of refinancing successfully are much greater if you keep these helpful tips in mind.

If you enjoyed this post, make sure you subscribe to my RSS feed!

Tags: Interest, loan, mortgage, Rates, Refinance

• Reasons to Consider Refinancing Your Mortgage
• Mortgage Applications Plummet
• Mortgage Forecast Slashed For 2009
• Mortgage Interest Rates:To Lock or Not To Lock?
• Watch For Hidden Costs In Refinancing
• Lower Interest Rates, But Refinancing Still Difficult
• 3 Tips for Finding the Right Line of Credit
• Advice for Tax Procrastinators