Mortgage Refinance Loans Refinance Mortgage RatesRefinance a mortgage Refinance a loan Refinance mortgage interest Refinance mortgage rates
Could I refinance my mortgage?
If you can lower your current interest rates by 0.75% to 1% or higher, then it might make good business sense to consider a funding measure. Your first task is to compute your saving when you carry out the refund. Let's say, for example, you have a 30-year mortgage for $200,000.
By the time you took it out, you received an interest of 6.5% (fixed) and your start of the period fee is $1,257. If interest rates are now 5.5% (fixed), this could lower your total $1,130 per month. That would be a saving of 127 US dollars per months or 1,524 US dollars per year. Next, you must ask your new creditor to charge your total closing cost for refinancing if you continue.
When your cost is about $2,300, you know that your breakeven point would be 1.5 years in the household ($2,300 split by $1,524 = 1.5 years). If you are planning to stay with the company for two years or longer, it makes good business sense to refinance. As a result, you may not have enough capital in your home to pay the 20% down on the new mortgage and may need to make a bigger than anticipated down deposit.
Or, you may need to take out mortgage protection, which will eventually boost your mortgage payments. So, in these cases, even with the fall of interest rates, your actual savings may not amount to much.
A variable interest mortgage is a variable interest mortgage with an interest rating that varies on the basis of a publicly available interest index (such as Prime or LIBOR). Loans with variable interest rates have periods of interest, usually 3, 5, 7 or 10 years. At the end of the lock-up term, your interest may rise or fall according to the interest index applicable at that point.
A variable interest mortgage is a good choice if you do not intend to live in the home throughout the life of the mortgage, or if you move often. As you do not need a longer-term mortgage, you can receive a lower interest and a lower amount during the interest fixing year.