Mortgage Refinance Decisions
With mortgage rates at historic lows most homeowners have considered refinancing their current mortgage. According to the US Census Bureau’s 2009 American Housing Survey, over 24 million homeowners still have mortgages over 6 percent. Unfortunately, many of these folks (maybe you included) have assumed that refinancing is impossible because of losses in home values, but a growing trend in refinancing may debate that belief.
Interest rates are at historic lows for more than mortgage rates. Have you looked at your bank savings or CD rates lately?
If you have been lucky enough to save during this economic downturn you are probably frustrated trying to find a good place to invest your savings. Bank rates for savings and CDs or hovering around a ridiculous 1 percent and the stock market is still on a regular rollcoaster that often ends in negative territory.
Could your home be your best investment right now?
With mortgage rates consistently reporting record new lows each week, homeowners are now scrambling to lock in these long-term savings, even if it mean putting “cash-in” on their mortgage refinance.
Despite negative equity in their homes, homeowners know they are going to be in their home for years to come and home prices are beginning rise in many markets.
This scenario could be good news for borrowers with saving, good credit, and a steady job. You can lock in an all-time low mortgage rate, pay down your mortgage, lower your payment, and get a healthy return on your investment.
Reversing the refinance boom trend of cash-out refinances from a few years ago, Freddie Mac is reporting that 22 percent of borrowers who refinanced early this year paid additional money at closing–making “cash-in” refinance a hot trend at one of its highest rates since 2002.
This seems to follow the broader trend of consumers paying down debt and turning away from credit. Smart homeowners seem to see current mortgage rates as an opportunity to make some smart personal finance decisions, like:
- Bringing mortgage into conforming loan limits (lowering your payment and rate)
- Eliminating second mortgages or mortgage insurance
- Paying down current mortgage to lower monthly mortgage payments
- Accelerating mortgage pay-off
- Shorten mortgage term and total interest expense
Is a “cash-in” refinance a smart move for your mortgage? Have one of our mortgage professionals run the numbers for you today. Call Michigan’s Top Mortgage Lender in customer experience at 248-724-2200
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