Now might be the best time for home owners to refinance their Stephenville home. Mortgage rates remain at historic lows, the lowest since long-term mortgages began in the 1950s. And with the majority of home sales occurring in the spring and early summer – April, May, June, and July account for more than 40% of all housing transactions annually – we are coming up on the time of year when lenders will be offering new property purchase loans. Furthermore, there are a lot of home ownership tax benefits which should be acted upon before risking any changes to the tax deductions available.
Also, some economists are warning that interest rates might rise in 2013, which means the window of opportunity to lock in the lowest rate possible might be closing soon. “If you’re considering refinancing, there’s really no point in waiting,” says Frank Nothaft, the chief economist at Freddie Mac, who, along with Fannie Mae and the Mortgage Bankers Association all are projecting that rates will keep ticking higher this year. Freddie Mac and the Mortgage Bankers Association predict the average rate on a 30-year fixed-rate mortgage could reach 5% this year. When you refinance, you start a new term. So if you have 25 years left on your 30-year mortgage and you opt to refinance with a 15-year loan, you will pay off your mortgage more quickly, though the monthly payments might be higher. If you refinance into a 30-year loan, it will take you longer to pay off your mortgage, though your monthly payment will be lower.
Not all homeowners should consider a refinance, of course. If you aren’t planning to stay in your home for long, refinancing into a 15- or 30-year loan—or even an adjustable-rate mortgage—could cost you more in the end, since you might not recoup the one-time costs that come with refinancing, says Doug Lebda, chief executive of LendingTree. All of these considerations of course can be made in conjunction with an informed real estate agent.
As real estate experts in the Stephenville area, considerations for refinancing could be discussed instead as an opportunity to upgrade properties. To help decide between the two courses of action, give us a call today.