That doesn't just impact those in the market for a new home but now might be the perfect time to refinance and lock in a lower rate.
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"Getting cash out on a mortgage is still the cheapest interest rate than a second, an equity line or even pulling cash off a credit card," said Paul Salazar.
Salazar is a mortgage loan originator with Sierra Pacific Mortgage and says soaring property prices have resulted in a record amount of home equity on hand.
While interest rates have ticked up a little from where they were in 2020, they're still low enough to entice many homeowners to wonder if now is the right time to refinance their home loans.
"It is still historically low. Back in 2003 when I bought my house, the interest rate was five. Right now, the average interest rate is anywhere from 3.875 to 3.5, so if it goes up a little bit, it's still fine," said Salazar.
Salazar recommends you should consider refinancing if your credit score or debt to income has dramatically improved since you first took out your home loan.
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Utilizing the equity in your home to lower monthly payments or to take cash out is also something he's seeing a lot these days.
"This go-round in 2021 is people actually taking the equity out because values are on the rise, so now they can take the equity out, do a home remodel, pay debt off, go on vacation. Those are the things that are happening right now with home refinances," Salazar said.
While lower interest rates will benefit most homeowners, refinancing may not make financial sense to some.
Experts warn if you can't afford the closing costs or plan to move soon, you won't recoup the closing costs before you sell.
Experts say when refinancing, you'll need a credit score of 700-plus because the better the credit score, the better the interest rate.