We're constantly bombarded by lenders to refinance our mortgage under a variety of programs. The volume of offers can almost make you numb to the rational consideration.
There are common rules of thumbs that homeowners and agents use such as not refinancing more often than every two years or there must be at least 2% savings from your previous mortgage rate may not always be accurate.
The reality is that if you can refinance for a lower rate and you'll be in the home long enough to recapture the cost of refinancing, it should be considered. The costs of previous refinancing that haven't been recaptured by monthly savings may need to be added to the costs of the new refinance.
Take a look at the chart that shows the average rates according to Freddie Mac for 2012. They are lower today than they were in January of 2012 and for the ten years before that.
Refinancing may save you a substantial amount of money, especially if you're going to be in your home for a long time. It is definitely worth investigating. To get a quick idea of what your savings could be, use this refinancing calculator.
Sooner is Better than Later
Buyers who have delayed purchasing a home due to concerns about what might happen to the tax laws affecting home ownership should feel comfortable about getting back in the market. The recent legislation passed by Congress and signed by the President continues to value homes as a favored investment.
For a summary of specific real estate provisions in the "Fiscal Cliff" bill, click here.
Whether the delayed purchase is for a home to live in as your principal residence or to use as rental property, taking action sooner is better than later.
Reasons to buy now:
- The house payment with taxes and insurance is probably cheaper than the rent.
- Rents will continue to rise making the difference even greater in the future.
- Lock-in the principal & interest payment with a fixed-rate mortgage.
- 30 year mortgage terms are available to most borrowers.
- The mortgage interest deduction is intact for the majority of taxpayers.
- The capital gain exclusion for principal residences up to $500,000 remains in place.
- Prices are going up due to lower inventories and several years of low housing starts.
Contact me about any specific questions you have or information you need.