What is your current interest rate on your mortgage? What is the current interest rate in today’s market? If the interest rate in today’s market is lower than your current interest rate then you should consider refinancing. For example, if you have a 30 year loan and an interest rate of 6% for a $200,000 home then your monthly payment would be $1,199. If you are able to refinance your mortgage with a new interest rate of 5.5% then your monthly payment would be $1,136. Over a span of 10 years you have just saved $7,560 with your new mortgage!!!
Is your current credit score higher today than when you originally purchased your home? If your credit scored has improved then you may be eligible for a lower interest rate on your mortgage. Usually the higher your credit score the lower your interest rate.
Do you have an adjustable rate mortgage or a fixed rate mortgage? If you have an adjustable rate mortgage then your monthly payments will change as the interest rates change. As you may know this was a big catalyst of the housing market crash. Those with an adjustable rate mortgage saw their monthly payments skyrocket so high they were unable to continue making mortgage payments. For peace of mind in today’s economy you may want to refinance to a fixed rate mortgage. This will ensure a steady interest rate and monthly payment.
