Refinancing Your Home Still a Great Deal

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Filed under: Market Comentary

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Refinancing your home is always a big financial decision. And, with the mortgage rates still very low, if you’re a homeowner who has good credit and a steady job, it could be an excellent time to seriously think about refinancing.

According to a recent article by Josh Garskof, there are some things to help you decide if now is the right time to refinance.

Marilyn Capelli Dimitroff, certified financial planner says that refinancing is paying off your current mortgage and taking out a new loan at a lower interest rate, and that may be a great deal for you if you can drop your interest rate by at least half a percent.

You just need to remember that there are usually costs to refinancing. You will probably need to pay bank fees, attorney fees, appraisal fees, and title insurance fees that could cost you about $3,000 to $5,000.

There are a number of online refinance calculators, but many are inaccurate and do not estimate taxes and insurance properly so contact me if you want the most accurate numbers.  It only takes a few minutes to put these calculations together.

Dimitroff also explains that you need to also remember that you are extending the loan to 30 years from now. Take into consideration how many years you are into your loan and how old you are.

Garskof says that if you are concerned about extending your loan too far into the future, you can consider a few options.

1. Take a 15 or 20 year loan instead of the average 30. Doing this will generally earn you a lower interest rate. However, the shortened loan period most likely will result in a higher monthly payment. If you afford this, it can definitely be beneficial because you pay off your mortgage in a shorter amount of time.

2. On the other hand, if you can’t afford this, see if you can take the 30-year loan and use some of your monthly savings to pay off more of your mortgage each month. Doing this will allow you to shorten the length of your loan.

If you have any questions about refinancing, please feel free to give me a call and we can discuss your options.

Source: http://time.com/money/3709982/when-refinance-mortgage/ from website www. time.com

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