Homeowners who missed the last refinancing boom have been given another chance!
Interest rates for 30-year fixed mortgages are at their lowest level in over a year and a half last week, and remain close to their lowest level in 50 years. Not many experts expect rates to stay low, however. According to the Mortgage Bankers Association, 30-year fixed mortgage rates are should end the year at 5%. The mortgage industry trade group also predicts rates at 5.4% by 2016.
In addition to low rates, the Federal Housing Administration just lowered their mortgage insurance premiums by half of a percent. This may not seem like much, but it could potentially save homeowners hundreds of dollars a month in MI premiums.
With current mortgage rates low (but expected to rise), U.S. homeowners are submitting applications to refinance by the tens of thousands.
So does it make sense for you? Well, that depends on a variety of factors, but most likely the answer is yes. Here are some questions to ask yourself:
Do you have equity in your home? Although there are types of refinance plans (like a Streamline FHA/VA and HARP) that DON’T require you to have equity, most conventional refinance plans will require “sufficient home equity” (meaning a loan-to-value on your home of 80 percent or better).
What is your current interest rate? Although this shouldn’t be the ONLY factor in refinancing, it’s a major one. Saving even $100 a month thanks to a lower rate adds up to thousands over the lifetime of your loan.
What are the closing costs to refinance? Some lenders may help cover your closing costs, while others may not. Closing costs may also be added to the loan balance if you don’t have cash on hand to pay them. Your lender should go over several options with you to determine what makes the most financial sense for you.
If you’re interested in refinancing, contact my office today! We have a number of loan products available to meet your needs. Call 702.331.8185 for more info.