Now that mortgage rates are at historically low levels, should you be refinancing your mortgage? Everyone’s situation is different and the answer will depend on several factors.
Your Current Mortgage Rate
There are some costs involved with refinancing your mortgage, so you need to be able to save money on your monthly payments in order for refinancing to make financial sense. Most experts will tell that you need to obtain a new loan with mortgage rates that are at least a half of one percent lower than you are currently paying to save you any money, once you factor in the costs of refinancing.
Type Of Current Mortgage Loan
When you refinance from an adjustable rate mortgage into a fixed rate mortgage, you will usually pay slightly higher mortgage rates on the fixed rate loan. But, you will lock in the fixed interest rate for the life of the loan. With the current low mortgage rates available on a fixed rate mortgage, this may the best time to switch from an adjustable rate mortgage into a fixed rate mortgage, and eliminate the risk of your interest rate increasing in the future.
Length Of Time You Will Remain In Your Home
Since there are usually some fees involved with refinancing a mortgage, it may not make sense to refinance if you plan on moving within a couple of years. The cost refinancing may be more than any savings you will reap from refinancing to a lower rate, unless the new interest rate is significantly lower than the rate you are now paying.
And The Answer Is…
For most people this may the opportunity of a lifetime to refinance and lock in low mortgage rates on a fixed rate loan on their home. Mortgage rates may never be this low for a long time. You should be able to save thousands of dollars over the life of your mortgage loan when you refinance at today’s low rates.
Related posts:
- Does It Pay For Me To Refinance My House?
- Is It Time to Refinance Your Adjustable Rate Mortgage?
- Can Mortgage Refinance Rates Affect My Finances?
View full mortgage loans post on US Mortgage Rates
Tags: time, fixed rate mortgage, Mortgage, Refinance, fixed rate loan
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