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Should You Refinance Your Mortgage
If you’ve been thinking about refinancing your home, now might be a good time to give your mortgage company a call. As of 9-19-2019, a 30-year fixed rate mortgage is currently averaging well below 4% APR, down five-eighths of a percent from where they were this time last year.
You Could Afford More House!
That means today you could buy a house that is 10% more expensive than your current home, and pay the same every month for your mortgage! In terms of refinancing, that means you should expect to pay considerably less each month.
Is Now The Time To Refinance?
Here are a few things to consider:
- When did you purchase your home? If it was before July 2014, chances are refinancing will lower your interest rate and save you money every month.
- Are you paying Private Mortgage Insurance (PMI)? If you used a conventional loan and put less than 20% down, odds are you’re paying an extra amount every month to cover your mortgage insurance. By refinancing, you may be able to stop paying for PMI.
Do you have an FHA loan? If you’re paying FHA Mortgage Insurance Premiums, now is the perfect time to refinance. Earlier this year, the Federal Housing Administration lowered their FHA MIP rates.
- Do you have credit card debt? Refinancing will mean lower monthly mortgage payments, giving you extra money to pay off your other debts.
- Are you looking to make home improvements? If you’ve been paying on your home for some time, you’ve built up equity. That means your home is now worth more than you owe on it. Rather than taking out a higher-interest home equity loan, you can refinance your home for more than you currently owe, and use the extra money for your improvement projects.
When Should You Refinance?
When Should You Refinance?
- Now! The FED has been threatening to raise interest rates for some time, and while it hasn’t happened yet, these historically low rates can’t last forever. Rates could rise at any time.
But even if they don’t, there’s no sense waiting around for an even lower rate. Yes, it is possible rates will drop slightly from here, but while you’re waiting around for that possibility, you’re continuing to pay too much for your mortgage.
Consider a Zero-Closing Cost Mortgage
If you’re still not sure you’re ready to commit, consider a zero-closing cost mortgage. When you refinance your mortgage, you typically have to pay or closing cost, just like when you first purchased your home. That’s not something you want to take on too often, so if you have to, it makes sense to lock in the lowest rate possible first. But here’s the thing, you may not have to pay closing costs.
Many lenders will pay for part or all of your closing cost, and in exchange you agree to pay a slightly higher interest rate. The additional interest varies based on the lender and the value of your home, but it is typically very small, and you should still see substantial monthly savings. Plus, if rates continue to drop, next year you can refinance at an even lower rate, again with no closing costs.
Whether you’re ready to refinance or still trying to decide, Plattsburgh Mortgage can review your options and help you choose the best approach for your family. Give us a call today.
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