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We’ve been talking for months about the low interest rates. These have been great for homebuyers—but what if you’re happy in your current home? Should you take advantage of the rates and refinance? The answer—it’s complicated. While realtor.com states that mortgage refinances rose over 200 per center during the summer of 2020, the process of refinancing can be a bit time consuming and really not worth it for some homeowners who already have a relatively low rate. Refinancing also comes with costs including closing fees. And if you’re not shortening the length of your mortgage when refinancing (say, moving from a 30 year to a 10 year mortgage), you’ll be adding on a significant amount of interest over time. We like this advice from investatopia.com, which says that refinancing can make sense if you “have an FHA loan with private mortgage insurance (PMI) that can’t be canceled and you go for a shorter term than your current mortgage. If you have more than 20 percent equity, you can refinance into a conforming loan with no PMI due.” While the low interest rates are very attractive, be sure to get a full snapshot of how a refinance will impact you now and for the future. We can help you to make these calculations, so give us a call with questions! |
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