You are Here: Articlelogy.com » Home-and-family » Family » How Do I Know if I Should Refinance?

How Do I Know if I Should Refinance?


Go to: Previous Article Next Article


The end of November, the average interest rate on a thirty year fixed rate mortgage was around 5.5 percent. It was the biggest drop in a week since the 1970s. There are plans for the Treasury Department to lower rates to 4.5 percent for those purchasing homes, and may extend those rates to homeowners wishing to refinance. Many homeowners are jumping on the bandwagon to refinance. It was reported the week after Thanksgiving that applications to refinance mortgages were up 200 percent from the week prior. Many who have chosen to recently refinance are trading in an adjustable rate mortgage for the peace of mind of a fixed rate mortgage. Others wish to refinance to simply get a better interest rate or terms to save money on their monthly payments. The rates may be enticing, but banks have also tightened their lending practices. That means that many who applied to refinance were not approved. To qualify for the lowest rates, consumers must now have excellent credit scores and must put in a bigger downpayment. Additionally, a growing number of homeowners no longer have enough equity in their homes to refinance, due to drops in home values.


Homeowners wishing to refinance will undoubtedly be tempted by low mortgage rates. Some consumers are gambling that the rates will decrease even more. Just as rates go down, rates can go up and you could miss a golden opportunity to refinance. Most analysts advise consumers who are looking to refinance to take the bull by the horns and lock in the low rates. If you are wondering if a refinance makes sense for you, the simplest thing to do is calculate your savings and costs for the time you plan to hold the mortgage. Subtract the estimated new monthly payment from your current monthly payment to determine how much you would save each month under the new rate. Then, add up all the costs of the refinancing. Lastly, divide the total cost of the refinance by the monthly savings to figure out how many months it will take you to actually start saving on your monthly payments. This is called your break even date. If you plan to be in the house later than your break even date, it is probably worth trying to refinance. Say, for instance, your break even date would be 18 months from the time of your refinance. If you expect to sell the house in a year, then the refinance may not be a good financial move.


No one knows if the current low interest rates will stay steady, increase or decrease even further. If you plan to refinance, consider taking the opportunity to do so under the current low rates before they go up again.



Article Source: Articlelogy.com
- Credit Cards A big selection of Cards in all flavors: Bad Credit Cards, Secured Cards, Prepaid Cards, Credit Cards for Canada, Low Interest Cards, etc -


Word Count: 464




Reduce Your Debts Without Bankruptcy. See How Much You Can Save. Free Debt Analysis



Read Previous Article ~ Read Next Article
 


Selected Articles

1: Public Car Insurance in Canada
2: Monthly Car Insurance
3: Why Compare Vehicle Insurance Quotes
4: Way to Get your Unique iPhone Apps Developed
5: Why Do I Need to Attend a Fitness Resort?
6: Contact Lenses Online: Convenient, Less Time Absorbing, Order On The Spot
7: Want Assist With Internet Marketing? Try These Suggestions
8: The Foam Filled Chairs Are Perfect Items of Furnishings
9: People clinging to their content sending dcma requests
10: The Enormous Bean Bag is low priced along with a top quality item of furniture
11: Tips on how to Handle Cholesterol Levels to be Healthful
12: A good solid Global One Ultimate Power Profits Paradigm Shift Platinum Superbly Inspection
13: Car Maintenance: Much better Than Auto Repair St. Louis Case
14: Choosing B&b Hartbeespoort Dam
15: Melaleuca- An Impartial Review- So is this a Melaleuca Scam or can you honestly generate income with this business?
16: Los Ciclos Grado Medio en Catalunya interesan a los estudiantes
17: Tips To Start Successfully Marketing On the web Today
18: Prescription Assistance Programs, Goal and Rewards
19: Way to Find an Efficient SEO Service Provider
20: Joomla Development for your Website
21: Website Design Graphics for Niche Businesses
22: Recycling Help in Keeping our Environment Thoroughly clean
23: Nashville Recycling Info for the Folks of Nashville
24: Personal computer Restoration - Suggestions for Locating a Dependable provider at Waukesha
25: Would like To order Tunes On-line?
26: Viviane Skincare- A Completely Independent Assessment By an Expert
27: Dallas Texas HCG Diet plan Protocol
28: HCG Diet Protocol, it genuinely Succeeds
29: The Functions for Charter Jets
30: Try Out the Well known Athlete's Alfredo with Homemade Alfredo Sauce recipe
31: The Broccoli Cheddar Spinach Soup Recipe Is easy To Actualize
32: Technology Consulting Overview
33: Join the opportunity Get Pre-launch Immediately And Tie down Your Place
34: Beneficial Suggestions For Achieving Article Marketing Results
35: Why should you opt for promotional pens?
36: Types of stress relievers to keep you hale and healthy
37: Mistakes to avoid while choosing novelty pens


Read Previous Article ~ Read Next Article

You are Here: Articlelogy.com » Home-and-family » Family » How Do I Know if I Should Refinance?