Mortgage Rates Drop Again -- Homeowners Can Save Hundreds Per Month By Refinancing
If you own a home, the rate drop could mean serious financial savings over time.
In fact, according to data and analytics firm Black Knight, nearly every mortgage loan originated in 2018 could see a rate drop via refinancing. In total, a whopping 6.8 million homeowners could now qualify for a refinance and save at least 75 basis points—or around $268 per month. Less than two months ago, just 2 million homeowners could see these kinds of savings.
The general rule of thumb is that the prevailing rates on the market need to be 50 basis points lower than a borrower’s current mortgage rate for a refinance to make sense.
Homeowners who could benefit from a refinance shouldn’t wait to begin starting the process — even if they think interest rates will go even lower this year.
Waiting and holding out for a better rate is a total gamble on the part of a home buyer!
- Refinancing to a lower interest rate also allows you to build equity in your home more quickly.
- With a Lower Rate it may be possible to refinance to shorten the loan term—say, from a 30-year to a 25, 20,15 or 10 -year fixed mortgage—without changing the monthly payment by much.
Do all mortgages make sense to refinance? The answer is no. Each mortgage situation is different. Some of the questions you need to have answered are: calculate how much time will it take you to break even?, how long so you plan on staying in your home?, how many years are left on the current mortgage?
With all mortgages, there are closing costs involved in addition to setting up a new escrow accounts for property taxes and hazard insurance. These costs could be added to the loan amount which will usually have a minimum increase in monthly payment i.e. If closing costs and escrows were $5000.00 on a $300,000 loan amount @ 3.875% the cost would be $23.51 per month for 360 months.
If you recently bought a home or refinanced to a lower rate of .50 or more than the current rate it makes sense to evaluate your options to see if it’s worth refinancing.
NOTE: If you currently have a VA Loan or a FHA Loan we have streamline refinancing programs that require very little paper work and in most cases no appraisal, no income, no assets!
Contact me today 904-712-1500 or www.CheckHomeLoans.com to review your mortgage and see if it makes sense to refinance while mortgage rates are super low!
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