Colli Real Estate

Should I refinance my home mortgage?

I saw a headline today that mortgage rates are falling, which led me to wonder about my question…
I owe about $115k on my home which is valued at about $180k. I’m in the fifth year of my 30-year loan with a rate of 6.125% I currently pay about $1050 (plus about $150 extra) per month. My credit is very very good. I could easily afford to pay $1500 or $1600 per month mortgage payment. Could I and should I try to refinance right now? If so, should I go for a 20-year loan since I could likely afford the payments and possibly get a lower rate?

Well my answer to this questions varies, if you want to refinance to take out equity as well as lower the interest rate, I would have to say no. By pulling out the equity you would actually end up paying more interest than you are right now. Unless you are very good with money and investments, in which case leveraging equity from a home can turn a good profit, but you need to make sure you have all of the pieces of the puzzle before you make a decision.

If you simply want to refinance the current amount owed for a lower interest rate and plan on staying in the house for a while, go for it. You will have to spend some money to refinance so again, make sure you do your research, but lowering your interest rate by even 1% can make a big difference in how quickly you can pay off your loan.

Refinance Mortgage Rates

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