Mortgage interest rates hit an all-time low during the first week of Setempber 2019 for the last one year. The interest rate has fallen at least 1% lower than it was during the same period the previous year. A lower rate will undoubtedly benefit a homeowner as monthly Principal and Interest (P&I) will be lowered. Is it time to refinance? Let us look at the what refinance means, discuss factors and possible costs to refinance.
What is refinance? A refinance is an activity where the previous mortgage is paid off, and a new mortgage is issued.
Current loan condition – Some lenders have a holding period (3 months, 6 months, etc.) before which refinancing will not be allowed.
Costs – Refinancing involves costs like Application Fees, Title Fees, Lenders’ attorney fees etc.
Duration of Stay – How long do you plan to stay at the property after refinancing
Now it is a trade-off between costs involved in refinancing vs. the saving achieved by lowering monthly mortgage.
For example, on 400K mortgage, 30 years, the current interest rate of 4.625 and new interest rate of 3.125, the monthly saving will be $368. There is undoubtedly a benefit of refinancing. To get started, work with an established mortgage broker to review your current mortgage and get a loan estimate from them. The loan estimate would break down the costs, interest rate, and your mortgage payment.
If you are in the market to buy or sell, contact Poogle (972)4087402, an experienced and knowledgeable real estate.