Should You Refinance?
Do you want to save $2,000 a year?
The answer is “yes”.
My second most heard question of late has been, “Should I refinance?”. As usual, the default answer up until this year has been, “Depends on your situation.” However, because of the low interest rates in 2019, recently I’ve been saying, “Probably”. Here’s what I mean.
If bought a home in the last eight or so years, your interest rate is probably between 4.25% and 5%. It could be more, it could be less, but that’s the general range for the average buyer. At the time of this writing (9/27/2019), the 30 year FHA interest rate is 3.36%. That 1% difference doesn’t sound like a lot, but it is. It really is.
Go to this website: NerdWallet.com/Mortgages and see what I’m talking about.
Now, this website doesn’t account for property taxes or homeowner’s insurance, so keep that in mind when you see a number way lower than your current mortgage. The good news is that those two numbers won’t affect your decision to refinance. Those costs have to be paid regardless and interest rates won’t affect those fees.
I plugged in my information, and quickly realized I need to refinance. I could be saving $165 a month on my mortgage. That’s almost $2,000 a year. Dang. That’s like the equivalent of a 2005 Ford Focus. I could be buying an extra 2005 Ford Focus every year, for the next 30 years.
How much could you be saving?
I know that a home refinance seems like it could be intimidating. You remember what it was like when you bought the home, with all the paperwork, and pressure, and emails? Well, more good news is that a refinance is much easier. There’s little time pressure. I mean, you already live in the house, right? There are closing cost fees, but the refinance calculator accounts for those and it’s still usually a good deal to refinance.
So what’s stopping you? You know how to reach me, and I’m happy to put you in touch with a great lender.
If you have any more questions or concerns, I’m always happen to give my advice and try to answer any questions.