Refinancing nowadays is more about thinking, “can I refinance” rather than “should I refinance”. This is mainly because of housing prices in the country, which have made it difficult for homeowners to take advantage of current low rates. So, let’s think again, how much my home is worth?
Since housing prices increased in the summer, they have fallen about 3 percent across the country. Current reports suggest that they might drop even further before this summer. If you have been waiting to refinance for more than a month, you should have another look at this important statistic. Otherwise, when you go to close, you might be surprised.
Some websites provide free estimate of home’s value based on similar home prices in the area. These often give a basic idea. When home values are decreasing like they are now, assuming to the lower end of these estimates is a better idea. Getting a professional appraisal done is the accurate way to keep track of your house’s value, but it is expensive.
How to overcome low house values?
If your home value is not allowing for refinance, the two options you have are a government loan modification or making extra payments until you can qualify. Both these options take time, and homeowners who are unable to refinance due to low price of home may have to wait. Fortunately, once summer comes, home prices might show some improvement. When this happens, you will have a narrow chance for refinancing. I would recommend to use it.
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