Interest rates have been at historical lows for a couple of years now, but surprisingly, a lot of homeowners who could benefit from a refinancing still haven’t made a move to take advantage of the potential savings that await them. The reason for this is because some people are simply not aware of the current rate, or they lack the motivation and drive to refinance. If you haven’t refinanced your mortgage yet, you could stand to walk away from tens of thousands of dollars.
Last year, the rate on a 30-year fixed mortgage was around 4.24 percent. So far, rates have remained low this year, averaging around 3.8 percent, which is a considerable drop from the rates in 2008, which averaged well above 6 percent. Experts say rates might increase to just a little over 5 percent by the end of 2015. They also say that even when refinancing a mortgage is a financially sound decision to make, a good portion of homeowners in the United States fails to do so. Granted, refinancing doesn’t always make sense for everyone, but you can find out pretty easily whether it would be a good move for you to make by doing some simple math.
According to experts, refinancing a 30-year fixed-rate mortgage of $200,000 from 6.5 percent to 4.5 percent would save more than $80,000 in interest payments over the life of the loan, even after factoring the usual expenses involved in refinancing. Since long-term rates are currently at around 3.35 percent, this same household could save roughly $130,000 over the life of the loan by refinancing. That is several hundreds of dollars worth of savings every month, and definitely not something to turn your nose up at.
Since experts say common barriers to refinancing by homeowners include psychological factors such as ignorance, procrastination, mistrust and the inability to understand complex financial decisions, it pays to do your research and get informed as to whether or not refinancing would be a sound financial decision for you and your family.
If you are planning to buy or sell a home, let The Incorvaia Team make the process as easy as possible for you. Call us at 440-879-7130 today!
