Is It Time to Refinance?
In the last 2 weeks, interest rates have dropped dramatically.
The word on the street is that rates may continue to drop. Still, there are never any guarantees. With rates hovering at about 5% for 30 year fixed loans for borrowers with the best credit, you’ll have to decide if you want to wait for rates to go even lower, or if you are ready to lock in today’s rate now.
How do you know if you should refinance?
Call your favorite lender. If you don’t know a good local lender, contact Kerby Claney with Stifel Bank & Trust. Tell Kerby I sent you and he’ll take care of you. If you want to call around to compare rates and fees, contact me and I can provide you with some additional suggestions.
Ask your lender how much money you would save each month if you refinanced now.
Next, determine what your total closing costs will be for refinancing. Most lenders roll the closing costs into the new loan so there are no out of pocket costs to refinance. If you would save $100 per month by refinancing, and it costs $1200 to refinance, then it would take 1 year to break even. If you plan to stay in the house for at least several years, it is probably worth refinancing your loan.
Click here to read about refinancing issues.
One suggestion – don’t roll all of your other bills into your mortgage. It’s one of the reasons so many homeowners owe more than their homes are worth. Read this post from earlier this year before you use your home to pay for anything other than home improvements.
And think twice before stretching your nearly paid off mortgage into a 30 year loan again. The goal is to get it paid off sooner rather than later. On the other hand, if you are worried about losing your job, lowering the payment now while you still can get refinanced may be smart. Remember that if you lose your job, or you take on a new job, you may find it hard to get approved for a new mortgage.
PDF Possibly Related Posts:
- Mortgage Interest Rates at Historically Low Levels
- 100% Mortgages for Homes in Rural Counties
- Housing Market Opportunity for Buyers that Act Now
- Using Home Equity to Finance your Life can be Dangerous
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