Refinancning...Is It Worth It?

By
Real Estate Agent with Prudential Network Realty

If you don't refinance you may be missing out on a big savings! 37% of borrowers have fixed rates higher than six percent? This equates to $1.2 trillion of home loans!
In most cases a homeowner can recoup the cost of refinancing his home in 12 to 24 months if he saves half to one percent or more on his interest rate. This is all contingent on the amount of the loan and the closing costs of the refinance. The closing costs do vary considerably from one finance company to another.

The Home Affordable Refinance Program (HARP) has allowed many folks to take advantage of the lower rates. You can still take advantage of this program through June of 2010. It allows borrowers to refinance their homes with a loan to value of up to 125 percent. Many loans that qualify for refinance can take advantage of the low rates today. The basic requirements are as follows:

 

  • Home must be owner occupied
  • Property can be 1 to 4 units for a primary residence
  • Current mortgage loan must be owned Fannie Mae or Freddie Mac
  • Mortgage must be paid current and up-to-date
  • Loan-to-value (LTV) can be no more than 125%

Even if you don't qualify for the HARP program you may want to check into refinancing. You could save big money! To figure it out all you have to do is take your current monthly payment minus your projected monthly payment and multiply that amount by 12. That equals your savings per year lets say $1200  Now take the the savings of $1200 and divide it into your projected closing costs, let's say $3600 and that gives you the number of years it will take you to break even on your refinance. After that you begin saving $$$. So if you stay in your house for 10 years after refinancing you have saved $8400 ($1200 X 7, the number of years after the break even point). Keep in mind that this is all contingent on the your new interest rate and the amount of your loan.

Happy Refinancing...now may be the prime time for you to add some disposable income to yourself!! Or you may want to consider a new home. It's a great time for that also.

SaintJohnsCountyHomesForSale.com

 

 

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I specialize in St. Augustine real estate and helping home buyers and sellers achieve their real estate goals. If you are looking for St. Augustine homes or properties in St. Augustine, please utilize the valuable tools that I have assembled on my website to assist you. Click here to search the MLS for St. Augustine homes for sale and St. Johns County property. Saint Johns County Homes For Sale is your one-stop-shop for St Augustine real estate, Palm Coast real estate and PonteVedra real estate. Or contact me to represent you as your "Single Agent" realtor!

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Rainer
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Doug Anderson
Tucker Associates Real Estate Services - Danville, CA
Bay Area Real Estate Views

Such a great time to refinance.  It was just a month or so ago that everyone expected rates to rise once the Fed stepped back from the MBS purchase program.  A super time to look at lessening the term of the loan without increasing the payments too much. ~ Doug

May 26, 2010 06:08 AM #1
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Rainer
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