The mortgage interest rate has been the lowest in the last 50 years. This prompted some to think about buying their first home, others was considering about refinancing. There’s always the great debate about should we refinance, does the cost justify the savings, how long will it be before I can recoup the cost?
If you have an adjustable rate on your mortgage, you should have refinanced last week. No question about that.
If you are on a 30 year mortgage, get a quote for a 15 years or 20 years.
If you have mortgage interest rate is more than 5%, you should call.
But what about the cost? Well, there will be a cost to refinance no doubt. The cost varies from one mortgage company to another. So, shop around. Some company may be able to offer you a Zero closing cost but the rate might be higher. Or you might be able to get a lower rate if you want but it comes with some closing cost. Make sure you shop around.
Why do you want to refinance? Well, consider this:
– if you refinanced to a lower rate staying on the same terms, you will lower your payment.
– if you refinanced to a shorter term (from 30 years to 15 years), you will be paying off in 15 years.
– if you refinanced to a shorter term (from 30 years to 15 years), you will be serving much less interest.
– if you refinanced to a shorter term (from 30 years to 15 years), you will be paying more principal instead of interest.