Homeowners could save thousands by refinancing their mortgages…
| October 2, 2020 | Posted by RealestateSectors.Com under News, Options, Discussions & Offers About Real Estate Sectors... |
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Mortgage rates are holding steady near historic lows₁, and homeowners who haven’t refinanced could be tossing thousands of dollars out the window.
The monthly mortgage payment on the typical U.S. home, worth $256,663 in August, would be $951 before taxes or insurance with a 3.75% mortgage rate, near where rates were a year ago. But with a 3.02% rate₂, that monthly payment drops to $868, which adds up to nearly $1,000 per year in savings. Over the lifetime of a 30-year loan on that same home, the difference between a 3.75% rate and a 3.02% rate comes out to $29,880.
As the coronavirus pandemic has impacted the U.S. economy, one effect has been persistently low interest rates. The Federal Reserve lowered interest rates to near 0% in March to help bolster the national economy and shows no sign of raising them. As a result, mortgage rates, which generally follow bond yields, have lingered near historic lows.
“Choosing whether to refinance your mortgage is ultimately a personal choice, but recent moves in mortgage rates have probably made that decision a whole lot easier for those who qualify,” said Zillow economist Matthew Speakman. “Mortgage rate declines have allowed many to lower their monthly mortgage payment or tap into the equity they’ve built in their home by refinancing their loan – offering some financial stability to many in a time of great economic uncertainty. With rates poised to stay relatively low for the immediate future, for many – including those paying mortgage insurance – a refi could remain a worthwhile endeavor.”
Refinancing does come with additional fees that can range from 2% to 6% of the loan’s principal₃, so homeowners who are planning to move within the next couple years may not save enough on a monthly basis to offset those fees…
Read more… (on Zillow Mediaroom) ⇒
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