Freddie Mac just released their interest rate report showing 30 year fixed rate mortgages averaging 5.08%, down from 5.14% a week earlier. The 15 year fixed rate is at 4.59%, down from 4.67%. There are a great many homeowners out there who purchased during the hottest appreciation period, say between 2000 and 2006. With the declines in home prices, and depending on their down payments, many of these may be underwater or at least not in a position to refinance based on current value. But, there is another group out there who purchased before those years, are still sitting on significant home equity, and at rates three or more points higher.
Between 1995 and 2000, rates fluctuated between around 7% to as high as 9%, but spent a great deal of that time period at 8% to 8.5%. And, that's a period when home prices may have been climbing, but many purchases were at prices that still show nice equity even now. Did you buy in that time period? What is your mortgage interest rate? Is it at say 8.25%, as many loans were made around that rate? If you have a $200,000 loan balance at 8.25%, your base PI payment would be about $1773/month, while a 5.25% rate now would make your payment around $1375/month. Could you use that $400 for some fun or just to beef up savings?
Your home may qualify, and even if your interest rate is less than 8%, it may be a good time to look at refinancing for other reasons. Come see us and we'll work the numbers for you. In fact, I can have a real estate agent provide a CMA for you to determine if the value is in the home as well BEFORE you spend any money out of pocket!!!
Contact Casey Moseman, CMPS