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Sometimes, refinancing your mortgage can really save you money. You may be able to pay less interest, lower your monthly payment, or convert from a 30-year loan to a 15-year loan (and build your equity faster!). But do your research and make sure that refinancing is right for you.
Mortgage rates are at record lows and after the fed's decision to buy billions in home loans, it has continued to ease costs for home owners and buyers.
The Federal Reserve announced in September that it would buy 40-billion dollars in mortgage backed securities each month. This makes it a good time to refinance your home if you're considering it. Both 30 year and 15 year loans are at low rates along with adjustable loans. But as we mentioned before, DO YOUR RESEARCH! Everyone’s situation is different. But if you haven’t refinanced in awhile, now may be the time. Mortgage rates are likely to remain low for a while, giving homeowners an opportunity to refinance. But don’t wait to long, Time is Money!
Below are a few tips to help you out:
Search online to find current home mortgage rates, include time length of mortgage and required down payments.
Call and verify the advertised loan rate. Make sure you speak to a loan officer who confirms the advertised rate, and ask at what point you could lock a rate in.
Compare your current mortgage rate with the rate you are considering. If you can lower your mortgage by at least half a point, it may be time to refinance your home mortgage. If you can reduce it by two points, then it is almost definitely time.
Watch interest rates. If you currently have an adjustable mortgage interest rate that is a half to two points above the fixed current rates, the time might be right to refinance your home mortgage into a fixed rate.
Decide how long you are going to stay in your current home, or at least how long you think you might stay in your current residence. This is key! You probably don’t want to refinance if you’re moving in the next couple years.
Do the math. Will you pay more in closing costs than you will save on your remaining monthly payments in your current home if you refinance?
Choose the bank that offers you the lowest interest rate and best overall deal.
We recently refinanced our home. We were fortunate enough to get into a 15 year loan at a lower rate. This has allowed us to reduce our monthly payments and get to our retirement years with our mortgage being paid off.
If you can, we would suggest a 15 year loan for various reasons, but the biggest one is that you can start to see the light at the end of the tunnel 7 to 8 years into your 15 year loan vs. the 30 year loan. The debt just doesn’t seem as burdensome and gives you hope for a final payoff. Now is the time to react. We just don’t see rates getting much lower than they are right now so act quickly, take advantage of the timing, and start saving money each month.
Savings: It depends on each person’s own situation. It may be a little each month or it may be a couple hundred each month. But over the course of the loan, it most likely will add up to THOUSANDS!
Remember to take your savings and put it towards any credit card debt or medical bills you may have and continue to get yourself out of debt!
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Doug and Sharon Heasley
(Parents of a Dozen)
Here are the previous tips to get out of debt if you missed any:
31 Days of Tips to Get Out of Debt! Explaining our journey.
Tip #1 to get Out of Debt: How to Find Excess Spending
Tip #2 to Get Out of Debt: How to save Money on your Energy Bills
Tip #3 How to Save Money on Lunches
Tip #4 How to Save Money Eating Out
Tip #5 How to Save Money on your Car
Tip #6 How to Cut More Car Expenses
Tip #7: 20 Tips to Conserve Water and Save $$$.
Tip #8: 20 Activities for Cheap or Free Family Fun
Tip #9: 15 Ideas for a Free or Cheap Date Night
Tip #10 How to Save Money on Subscriptions
Tip #11 How to Save Money on Your Phone Service
Tip #12 How to Save Money on Bottled Water
Tip #13: 5 Easy Ways to Save on Your Food
Tip #14: 10 Ways to Save Money During the Holiday Season
Tip #15: When do you Change your Furnace Filter?
Follow us as we share tips on how we keep our spending in check and still be able to have fun, enjoy ourselves, have quality family time, and keep ourselves debt free.
We use these safe non-toxic cleaners to clean everything in our home including our carpet and upholstery.
My husband and I just recently refinanced from a 30 yr mortgage at 4.5% to a 15 yr at 2.625%. As an added bonus, because our previous mortgage lender had already paid our property taxes, we received them back as a refund since they were taken out at closing and we ended up not having to pay ANY money out of pocket for the refi. They also paid for our appraisal, which saved us $450! Our goal is to pay off our mortgage in 10 yrs or less. I agree that a 15 yr mortgage allows you to see the light at the end of the tunnel, and we are so excited to see our dream of being debt free actually become a reality sooner than later. :)
ReplyDeleteIf you want to hire someone, call around, ask questions, ask for references, etc. You get what you pay for.
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Many companies help you to get a new home at an affordable mortgage rate. ABO Capital is one of the best mortgage agents who have a lot of experience and also have so many lenders who ensure the best mortgage rate.
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