2022 is the Year of the 15-Year Jumbo Refi

Published March 9, 2022

If you purchased an expensive home in recent years, it might be time for a 15-year jumbo refi. These loans are used to buy homes that exceed the limits created by Fannie Mae and Freddie Mac. In addition, homeowners currently paying off jumbo loans may want to consider a 15-year jumbo refi. This can help reduce recurring and long-term costs while quickly growing home equity. 

Why you should consider refinancing your loan 

People refinance jumbo home loans for a variety of reasons. However, most do so to utilize the following benefits: 

• Decrease your loan term 

• Access a lower interest rate 

• Modify the interest structure 

• Take cash out against your equity

When you refinance a loan into a 15-year jumbo refi, you have the opportunity to enter a borrowing agreement with shorter payoff terms. You will likely begin a higher monthly payment, but this is worth the cost for some homeowners. As a result, you’ll own your home outright sooner and significantly cut back on the amount paid toward interest over the life of the loan. If your income is higher now than it was when you signed for the initial loan, then shortening the term may be the right call. 

Many homeowners refinance their jumbo loans to gain a lower interest rate on their mortgage. Potential refinance candidates should check to see if interest rates are lower now than when they first took out the loan. Even a slight decrease could save thousands of dollars. 

Refinancing may also allow you to modify the interest structure of your loan. For instance, if you currently have an adjustable-rate loan, consider a fixed-rate mortgage refinance. That way, you won’t have to worry about your interest rate increasing. Fixed-rate loans keep your monthly payment the same, too. Additionally, if it’s time to update your home, you may want to refinance your mortgage to take cash out against your equity. 

Why jumbo loans are popular in today’s competitive markets

Jumbo loans are popular because they help people purchase more expensive homes than the average home selling price. However, this does not always translate to buying larger, more updated houses. Today’s most competitive real estate markets are seeing home prices rise exponentially. In other words, even a relatively modest home for a family could require a jumbo loan. A jumbo loan could ensure that you get the financing that you need. This type of loan can also help you purchase investment property and vacation homes. 

What are the pros and cons of refinancing a jumbo loan? 

There are several significant advantages to consider when contemplating a 15-year jumbo refi. First, those who choose this refinance option often have access to lower interest rates and reduced monthly payments, depending on the initial loan term. This can also help eliminate mortgage insurance, a common expense for jumbo loan borrowers. 

The disadvantages of a jumbo refinance include the possibility of a higher monthly payment. Additionally, the refinancing process can be extensive and time-consuming. Working with a lender like American Financing can help alleviate the stressors associated with the process. However, you’ll still need to provide financial documents, proof of income, and undergo a credit check. However, if the time is right and you’re ready to refinance, those potential drawbacks are well worth the effort.  

Who qualifies for a fixed 15-year jumbo refi? 

Homeowners with a good credit score typically qualify for a fixed 15-year jumbo refinance. A lender will check your debt-to-income ratio to determine refinancing approval. You’ll also be more likely to receive refinancing approval if you have a robust savings reserve. 

How to find the best refinancing rates 

To locate the best 15-year jumbo refi rates, be sure to shop around. Remember that shopping for a jumbo loan refinance is not as easy as searching for a conventional loan refinance. If you’re unsure where to start, we are ready and available to help guide the process.

Keep in mind that the best refinancing option may not be the one with the lowest interest rate. Let us know if you want to change the terms of your mortgage but aren’t ready for a 15-year mortgage refinance. Other options may better suit your financial goals.

Why is 2022 a good refinancing year? 

Experts predict that interest rates will stay low in 2022, making it a good time for a 15-year jumbo refi. Housing prices are also rising in many parts of the country. This means that 2022 is a good year for a cash-out refinance for those considering that option.

Should you refinance your jumbo loan in 2022? Before applying for a new loan, consider your unique set of circumstances. For instance, if your credit history took a hit during the pandemic, then it might be better to wait until you’ve had a chance to do some damage control. You might also want to consider whether you intend to stay in your home long-term. Right now, many people are leaving their current jobs and seeking new ones. If this is on your mind, then it would probably benefit you to wait to apply for a 15-year jumbo refi loan. 

Interest rates are unlikely to stay as low as they are in 2022. This means that if you are in a long-term jumbo loan, this may be a great time to refinance and enjoy the financial benefits