Many homeowners are rushing to take advantage of historically low interest rates. Refinancing a mortgage can help you in many ways. Before you apply for a mortgage, you’ll have to identify your refinancing goal.
Do you want to lower your monthly payment? Using a mortgage calculator, it’s easy to calculate how much you’ll save by refinancing. For example, if you’re currently paying off a $100,000 loan at 5% interest, your payments on principal and interest alone are $536.82 for a 30 year loan. Refinancing at 4% drops your payment to $477.41 – a savings of $59.41 per month or $712.92 per year. Depending on how many years you have left on your original mortgage, this is a tremendous savings.
Do you want to pay off your loan sooner? If you’re currently in a 30 year mortgage, you could refinance and pay it off by taking a shorter term loan. This will increase your monthly payment, but not as much as it would if interest rates weren’t so desirable right now.
Do you want to convert to a fixed rate? If you currently have a mortgage with an adjustable rate (ARM), your mortgage rate could go back up again once the mortgage rates rise. A fixed rate option could lock you in at a lower rate if you refinance now.
If you’ve decided that it’s time to refinance, please be sure to speak with your mortgage representative to help decide what’s best for you!
~ Wayne & Jean
Union County, NJ - a great place to live and work!
All opinions, information and data provided is deemed reliable but is subject to errors and omissions. Not intended to solicit other Brokers' clients. We cooperate with them fully.