Is it a good time to refinance your home loan?
Rates are at an all time low and lenders are looking to make loans. There is a lot of money in the system. So, is it the right time to refinance? Depends on what you are trying to achieve. Yes rates are as low as 3.25 on a 30 year loan, 2.75 on a 15 year loan and FHA is at 3.375/30 yr and 2.75/15 year. I also saw an ARM (Adjustable Rate Mortgage) for 1.8%/5year term. But “rate” is only one piece of this puzzle. Yes you can lower your payments, but is that going to help you achieve your long term financial goals? Oh, you do not have any long term goals; best get some! Traditionally, refinancing was about getting cash out of the “equity” built up or increase in value. That is now history and a bad idea in this economy. If you need to lower your payments, then make sure you do the “math”. Closing costs are usually 3-4% and if you do not plan on staying in your home for another 5 years, it may work against you financially to refinance. The simple answer is: DO THE MATH! Get good advice and make sure it is beneficial to your financial future. Lowering your rate and lowering the number of years you will be paying for your mortgage can save you a lot of money. It is like a forced savings account. There are mortgage refinancing calculation assessment tools online. We have a very experienced loan officer in our office, Robin Stallings. She would be glad to help you through the numbers. If you want to learn more about it, call Robin or me to discuss it with you.
