Amazing. I never thought I’d see a 30 year mortgage rate below 4%. It’s an amazing time to buy or refinance a home if you meet all the latest criteria. You know, have a job, have 20% equity in a home (refinance), have a 20% down payment, have a high credit score and the list goes on.
We refinanced a couple years ago at 4.87% and were thrilled to get that rate at the time. I’ve been considering refinancing but I’m not ready to do it yet. I think we have enough equity in our home to qualify for a new loan, but you never know with the falling real estate values. I’ve also been considering getting a 15 year mortgage but I don’t like increasing my payment during such an unstable economic environment. 15 year mortgage rates are also hitting record lows. The latest rate that CNN Money found was 3.26%. That’s cheap money!
so, I’ll run the numbers and then talk it over with my wife before we decide on whether to pull the trigger. I’d like to decrease the term of our loan because I know it would save a lot of interest over the term, but like I said, it will all come down to whether we are comfortable with the increased payment.
Anyway, check out the article from CNN Money.
We’re currently working with our lender to re-finance. We have 25.5 years left on a 30-year mortgage with 5.875%. A new 3.375% mortgage with a 15 year term will save us something like $70k-80k over the remaining life of the mortgage. Our base payment goes up by less than $200, which is what we currently pay extra every month anyways after paying off a student loan, and rolling that payment over.
Even if you think you’re underwater or think you won’t qualify, you should contact your bank anyways. You might be surprised!