Refinance Mortgage Rates News Articles
Interest Rates are Rising. You Better Refinance Now!
A general rule of thumb for home owners in the past was to refinance when mortgage interest rates are two percent lower than the current mortgage loan rate that you are paying. Nowadays, refinancing is still a good option, even if the current intereste rate is less than two percent higher than current mortgage interest rates. You should know that the smallest reduction in the interest rate will reduce your monthly payments. A quick example, the monthly payment (not including taxes and insurance) on a $150,000, 30-year fixed rate mortgage loan at 7.5% would be about $1,050. At 6.5%, the exact same loan would leave a monthly payment of about $950, about a $1,200 difference a year.
But even if refinancing now can save you some money, should you start shopping around for a new mortgage? Should you refinance? The answer depends on your current circumstances, and how long you plan on living in your home.
Do you currently have an adjustable rate mortgage (ARM)? If so, chances are you have seen your interest rate go up recently. Now might be a good time to refinance your ARM into a fixed rate mortgage with a consistent monthly payment.
Has your credit situation improved since you obtained your current mortgage? If so, you might qualify for a better interest rate if you refinance your mortgage now.
Do you have more money free that you could put toward your current Principal? If you said yes, you might consider refinancing your current mortgage into a shorter term mortgage loan. The higher payments and shorter term will allow you to build equity in your home at a faster rate. This will allow you to save a substantial amount in interest payments over the loan`s term.
On the other hand, if you have a short-term mortgage loan like the 15 year fixed-rate mortgage and you`re finding it hard to make your payment every month, you may want to consider refinancing your current mortgage loan into a long term fixed rate mortgage. You have to keep in mind though that although your monthly mortgage payment probably will drop you will most likely have to pay more in interest over the full term of the refinance loan.
Need to free up cash to cover other expenses? If you have equity in your home the best action may be to refinance your present mortgage into one with a larger principal. Simply putthis will turn your home`s current equity into fast cash.
Just remember, even if your immediate circumstances will indicate a mortgage refinance would be beneficial to you, refinancing a mortgage will cost you money up front, in the beginning. If you do not plan on staying in your home long enough to recoup these costs, then a mortgage refinance might not be a good choice. However, if you plan on staying put, refinancing your mortgage now before rates rise higher would be a smart financial move.
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Interest Rates are Rising. You Better Refinance Now!If you were going to refinance now is the time to do so, with interest rates rising you better act not to save money!
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