With interest rates dropping to a 50-year low due to the current economic climate, you may be asking yourself, “Should I refinance my home?” or, “Is this the best time to take out a car loan?” For many, the answer is yes, with mortgage refinances surging 79 percent and low interest rates translating to lower car costs for car shoppers. But before getting too hasty and filling out the necessary paperwork, borrowers should set themselves up to secure the best offers from lenders, which includes achieving your best possible credit score in a short amount of time. Use this guide to learn why you would want to refinance your home right now, how low interest rates can affect your car shopping experience and how to improve your credit score quickly so you don’t miss out on these historically low interest rates.
What Does Refinance Mean Anyway?
Refinancing a mortgage simply means replacing an existing loan with a new one. From taking advantage of lower rates to lower your monthly payment to consolidating debt, there are many reasons why someone would want to refinance their home. When refinancing for a lower interest rate, homeowners can increase the rate at which they build equity in their home as well as benefit from a lower monthly mortgage payment and improve cash flow. Other reasons homeowners refinance include shortening the term of their loan, converting from a fixed rate loan to an adjustable rate and accessing equity in the home to consolidate debt or handle other expenses.
Low Interest Rates and Auto Loans
While you might be avoiding large purchases right now, this could actually be an advantageous time to go car shopping. In addition to lower interest rates keeping car payments low, costs may also be relatively lower due to a downturn in sales — sales associates may be more inclined to strike a deal with you. In addition, a number of automakers, including Ford, Nissan and Hyundai, are allowing buyers to defer their payments and those with existing car loans to have payments rescheduled. Despite the drop in interest rates, auto loans and leases will still largely benefit those with top credit ratings, so setting yourself up for the best offers from lenders should remain a priority for borrowers.
How to Set Yourself Up for the Best Offers
While mortgage rates are at historic lows and car costs are more negotiable than ever, you’ll still receive different offers from different lenders and those offers will be largely determined by your credit score. Making sure you have the best possible credit score will earn you the best possible offers, and using a tool like ScoreMaster can help you get there faster. Your credit score has a huge impact on the annual percentage rate (APR) of any offer and can be negatively affected by a number of factors, like having a lot of high-interest debt.
ScoreMaster is designed to help borrowers achieve their best credit score in just 20 days, using a gamified dashboard that displays potential score increases or decreases based on spending and debt repayment. ScoreMaster also binds borrowers and mortgage brokers to a plan for better-quality loans, protecting against credit score drops during the refinance process and locking in a favorable rate. The power of ScoreMaster is multi-layered; not only will the tool help you achieve your best score, but you’ll also secure better offers from lenders and become more educated about managing your finances for the long haul.
Learn more about how you can take advantage of historically low rates with your best possible credit score with ScoreMaster.
*Legal Disclaimer – ScoreMaster is a patent-pending educational feature simulating credit utilization’s effect on credit scores via payments or spending. Your results may vary and are not guaranteed.
References:
- https://www.marketwatch.com/story/mortgage-rates-are-at-a-four-year-low-here-are-5-questions-to-ask-yourself-before-you-refinance-2020-02-10
- https://www.cnbc.com/2020/03/11/mortgage-refinance-applications-spike-79percent-as-interest-rates-sink.html
- https://www.cnbc.com/2020/03/03/heres-what-this-surprise-fed-rate-cut-means-for-you.html
- https://www.businessinsider.com/personal-finance/refinancing-my-mortgages-saves-me-130-a-month?IR=T
- https://www.forbes.com/sites/jimgorzelany/2020/03/17/car-buying-in-the-age-of-coronavirus/#3bf5290e7d0d