Refinace Today!

When you are first choosing your mortgage there are a lot of decisions to make and it may seem daunting. Maybe you chose a FRM mortgage and interest rates have been steadily dropping. Maybe you do not like the current terms of your mortgage, perhaps your monthly payments are too high. There is an easy way to fix all these problems; you can refinance your mortgage. When you refinance your mortgage you will lower your interest rate and lower your monthly payments while the company you refinanced your loan with pays off your current mortgage. Since you are lowering both your monthly payment and interest rate there has to be a catch right? Well you are usually extending the length of your mortgage, so even though you save now you will be paying more when it is all said and done. However it is worth it to save money now, so refinancing your mortgage is a very smart choice.

A Real World Example

In March 1992 the average rate for a 30 year FRM was 9.02%. These rates were the lowest they had been in years so it makes sense to think you would want to lock into this rate for the next 30 years. It was hard to predict how much farther the rates would fall and by March 2003 the going rate for a 30 year FRM had plunged to 5.88% and 5.25% for a 15 year mortgage. If your original mortgage was worth $150,000 in 1992 (which, adjusting for inflation, would equal $196,776 in 2003) and you had a 30 year FRM at 9.02%, you would be paying about $1,209.90 a month. If you refinanced at the super low interest rate of 5.25% for a 15 year mortgage, your monthly payment would be lowered to $954.64 a month ($702.86 a month for a 30 year FRM at 5.88%). If you have a FRM and interest rates are falling; it makes perfect sense to refinance and it can save you a lot of money in the short run.