Annual interest rates continue to hover at historically low rates of 3—4.5 percent. For people who purchased a home in the 1990’s or 2000’s and are pay-ing interest rates of 5.5%-7.5%, this could be a great time to consider refinancing your home loan.
By refinancing your mortgage (home loan), you can replace your current loan with a new one bearing better terms. Refinancing can result in lower monthly payments and save you thousands of dollars a year. For example, if you reduce the interest rate of a 30-year $100,000 mortgage by just 2% — for in-stance, from 6.5% down to 4.5% — you can save over $45,000 in total interest payments.
Homeowners in Columbia Valley Housing programs have been saving $100-$200 on their monthly mortgage payments with newly refinanced loans. Some have paid off their secondary loans from CVHA entirely with their refinancing package!
A cash-out refinance allows you to tap into your home’s equity by taking out a new mortgage for more than you currently owe. To do this, the market value of your home must be higher than the balance on your current mortgage and you would have to pay off any additional loans from CVHA.
To qualify for a refinance, you must be current on your mort-gage payments and have a good credit history. Just like lending, refinancing is a very competitive business, so shop around for the best rates and lowest loan fees.
Ask your bank about “FHA Streamline” refinancing that reduces loan fees.
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