Mortgage interest rates are at record breaking lows. Many homeowners are wondering if they should refinance and there is lots of advice and rules of thumb to pay attention to and it can be overwhelming and difficult to make the best choice for yourself.
The NBC’s The Today Show recently provided a clip that addresses some of the concern and topics of refinancing with the current low interest rate. Refinancing will always have costs associated with it. Advertisements of no cost loans simply means one is not getting the lowest rate available to cover the costs involved in refinancing. Understanding all of the variables and option is difficult.
Some of the key points raised include :
- The lowest rates come with the highest costs. Consider a slightly higher-rate option from your bank.
- Falling home values may make it harder to qualify for a refinance in the future. Your best time to act may be now.
- If you’re many years into a 30-year loan, you can consider switching to a 15-year mortgage to avoid “resetting” your term.
After all of the advice given in the clip and when asking around you simply need to make sure that your time frame for breaking even on the cost to refinance to a lower interest rate is reasonable to how long you plan to keep your home. Most homeowners will benefit from a refinance if they plan to stay in their home for at least two years.
If you have a VA Home Loan many of the concerns that are voiced are not applicable to you. The great benefits of a VA Loan make it extremely easy for you to refinance and streamline your loan to a lower interest rate. If you have any questions you can get a free consultation by calling 866) 825-6261.