DALLAS (CBSDFW.COM) – If you’re considering refinancing your mortgage, you’re far from alone.
Concerns over coronavirus and economic uncertainty are driving down interest rates.
In response to concerns over COVID-19, the Federal Reserve recently cut its benchmark interest rate to near zero.
The outbreak also caused mortgage rates to fall to record lows this month.
When Kirk Benners wanted to save money for his family, he refinanced his mortgage last November.
Now, he wishes he had waited.
“I wish I delayed, but you don’t know what tomorrow holds,” said Benners, who owns a home in Richardson.
Now lenders are seeing an overall spike in refinance applications.
Of all mortgage activity this week, the Mortgage Bankers Association estimated 74.5% of applications dealt with refinancing.
That number is slightly down from last week at 76.5 percent.
Shawn Broussard, the CEO and President of Service First Mortgage, said he’s seen a 73% jump in refinance applications over the past month compared to his monthly average in 2019.
While lenders face a mounting backlog of applications, consumers could find themselves waiting weeks, if not months.
With such high demand for refinance applications, mortgage rates could continue to fluctuate.
The average 30-year fixed rate mortgage rose to 3.36% last week, up 0.7% from the week before, according to Freddie Mac.
“The biggest thing we’re seeing is delays,” Broussard said. “That’s why time is of the essence to get your [applications] in. Just be patient.”
But Broussard argues rates are still historically low.
“If anyone’s at 4.5% or greater, you should talk to a loan officer or a highly trained professional to walk [you] through whether [refinancing] is worth it or not,” Broussard said.
Not everyone is looking for a change, though.
“My parents went through a time in the early ’80s when their rate was 11%, so I’m grateful we have a rate of 4%,” said Kyle Burdick, a homeowner who lives in Montgomery.
Refinancing may not always lead to savings.
Bankrate, a consumer financial services company, recommends refinancing if homeowners can reduce their rate by one half to three quarters of a percentage point.
“You got to do what’s best for your family. Proceed with caution and make sure it is a good deal,” Burdick said.
Don’t forget about lender fees.
If homeowners are moving in the immediate future, it may be cheaper to stick to an existing mortgage instead of refinancing.
To save more money, experts suggest owners should keep making the same payments, even after nabbing a lower rate.