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If you’re struggling to keep up with your mortgage payments, or you simply like the idea of being able to spend a little less money on housing each month, then you may be considering a refinance. That allows you to swap your current home loan for a new one with more favorable terms — like a lower interest rate.

But the final weeks of 2024 may not be the best time for you to refinance. Here are a few reasons you may be better off waiting.

1. Mortgage rates keep flip-flopping

In late September and early October, mortgage rates fell quite a bit, to the point where they got close to the 6% mark. But since then, mortgage rates have been fluctuating.

Mortgage rates were expected to start falling following the Federal Reserve’s September interest rate cut. In reality, they started falling a bit before that announcement was made and dropped a bit more in its aftermath — only to then creep back upward. And as of this writing, the average 30-year mortgage rate is 6.79%, which is hardly a bargain.

Until mortgage rates fall into a steady pattern of declines, you may want to sit tight on a refinance. If you refinance now, you may not end up with a much lower rate than what you already have.

2. You’re not sure how much longer you want to stay in your home

When you refinance a mortgage, you’re charged a bunch of fees known as closing costs to put a new home loan in place. The amount you’re charged will depend on your lender, and it’s smart to shop around for offers so you can compare different lenders’ closing costs and rates. To get started, click here for a list of the best mortgage refinance lenders.

But because you’re spending money to refinance, it’s important to make sure you plan to be in your home long enough to recoup your closing costs. And if you’re not sure, then you’re better off waiting.

Let’s say you spend $6,000 to refinance your mortgage, and that lowers your monthly payments by $250. This means it will take you 24 months to break even.

If you think you might move in two years or less, then refinancing doesn’t make sense. If you’re not sure, hold off until you’re more set in your plans.

3. Your credit score isn’t in the best shape

The higher your credit score when you refinance a mortgage, the lower an interest rate you’re likely to snag. You may be eager to put a new home loan in place before the end of the year. But at this point, that’s only a few weeks away. And it’s not a lot of time to boost your credit score substantially if it needs work.

A better bet? Give yourself several months to improve your credit score by paying all bills on time, reducing balances on your credit cards, and checking your credit report thoroughly for errors. Since mortgage rates aren’t so great right now anyway, you’re not missing out on much by waiting until 2025.

Refinancing your mortgage could be a huge source of savings for you in the long run. But it’s important to refinance when the time is right. And you may want to hold off on refinancing until mortgage rates settle into a pattern, your plans are certain, and your credit score is in a better place.

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