Mortgage rates have been at an all-time low, allowing many people to refinance. However, some people couldn’t refinance because they didn’t have enough equity in their homes, or they were waiting for rates to drop even lower.
According to the Freddie Mac’s weekly mortgage survey, the 30-year fixed rate dipped below 4.00% for the first time since the summer of 2013. If you have a loan that’s approximately five years old, your 30-year loan rate is roughly in the low 5.00% range. If your loan dates back to 2008, your 30-year loan rate is above 6.00%.
One reason to refinance is to receive a lower interest rate. John Inzeo, Vice-President of Wisconsin Mortgage Corporation, reminds customers that they also need to consider the costs associated with refinancing. “If your costs are too high, the advantages of a lower rate can be quickly diminished. Make sure your lender is evaluating the whole picture and explaining both the short term and long term advantages.”
Another reason to refinance is if you’re losing interest on your loan. Shorter term loans have higher monthly payments, but the amount of interest paid is lower and equity is gained at a quicker pace. You can refinance to shorten the term of the loan and spend less on interest costs. “I always caution customers to make sure they are comfortable with a higher monthly payment. Sometimes making one or two additional payments in a year to lower your principal can get you the same goal. Our Loan Officers can assist you in evaluating what’s best for your financial situation. Turning your 30-year mortgage into a 25-year mortgage through principal reductions can still save you thousands of dollars in interest. It’s always best to take to look at all options before you lock into a higher monthly payment,” said Inzeo.
Lower rates are a key factor when considering refinancing, but there’s more to it than lowering your monthly payments. “My main message to customer today is don’t miss this unique opportunity to improve your overall financial condition through refinancing. We have no guarantee that these rates will be available going forward. Most forecasters expect rates to increase sometime in 2015,” Inzeo adds.
If you want a price comparison, contact a Wisconsin Mortgage Corporation Loan Officer today.
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