Is Now the Right Time to Refinance?
Refinancing your mortgage is one of the smartest financial moves a homeowner can make. If you bought a home between July 2013 and July 2014 you should look into refinancing as it will likely save you thousands of dollars for many years to come.
Since late September when interest rates began falling, more and more Americans have refinanced their mortgages. However there are still many homeowners who haven’t yet, either because they don’t realize that rates have gone down or they don’t want to go through the process of refinancing because they think the process is too overwhelming.
It isn’t really as much work as you might expect and many times it won’t cost you anything. In fact, there are many mortgage companies out there such as the ones we work with, Guaranteed Rate and Salem Five, who often don’t even charge anything to do a refinance. They have no points and no closing cost refinancing programs. They can guide you through the entire process and show you the best refinance programs that will work for you.
How Much Can You Save?
Here are a few examples of the cost savings over the life of a loan when you refinance at a lower rate and the same term:
Let’s say your current mortgage is $300,000 with a 30 year interest rate of 4.5%. Your monthly payment would be $1,520. If you refinance at a 4% rate, your monthly payment would drop down to $1,432, a savings of $88 a month, or $1,056 a year. Over the life of the loan you would save $31,680!
If your current mortgage is $500,000 with a 30 year interest rate of 4.5% then your monthly mortgage payment is $2,533. If you refinance at a 4% interest rate, your monthly payment would go down to $2,387, a savings of $146 a month, or $1,752 a year. Your savings over the life of the loan would be $52,560!
Over the last 60 days rates have been at their lowest levels n 18 months and as of today the rate for a 30 year fixed is 3.91%. And keep in mind these are average rates. The rate you get will depend on how much you put down and which type of mortgage you get.
If you are paying a higher interest rate on your mortgage, you should take advantage of these low rates before they go back up. With rates this low, you could save tens of thousands of dollars over the life of your mortgage if you refinance now.