Have you refinanced your loan in the last month? If not, you may want to investigate it now. Rates have never been lower. In some cases we have seen clients save hundreds per month by locking in today’s historically low rates.
Earlier this year, the federal government ended its program to buy mortgage-backed securities. That stimulus program was run to keep mortgage rates low. Most economists expected that rates would rise once that artificial demand for the securities was halted.
In fact, rates have gone down. The private investment markets have moved to these more secure investments as fears over the European markets built throughout the spring. This demand has brought mortgage interest rates to the lowest levels since Freddie Mac started tracking rates in 1971.
Refinancing, however, is not for everyone. Even if today’s rates are significantly lower than your current rate, the upfront loan costs may outweigh the monthly payment savings.
Before you refinance be sure to do a little homework. Get all the facts and figures from your mortgage lender. Compare the upfront costs (such as appraisal, loan origination fee, and settlement costs) against the monthly savings and the length of time you plan to stay in the home. If you are planning a move in the next year or two, the math may say it is not time to refinance. However, if you plan to stay in your home long enough, then the savings can add up.
As always, feel free to contact us with any questions you might have. We would be happy to assist you.
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