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Why You Should Refinance Your Mortgage Now Before its too Late.

Now may be the right time to jump off the sidelines and refinance your mortgage because mortgage rates  at an all time low. They are so low that banks and mortgage lenders are swamped with people trying to refinance their homes.

Just as an example, recently, in early may 2009 ,  a fixed 30 year mortgage hit an all time record low of just 4.75 %.  At the time of this article, the rate has since rebounded a little to 4.96% , however that is still a really great rate. Also a 15 year fixed rate is still even lower, currently going at 4.63 %, ( at the time of this article ),  so with interest rates like that, it is certainly something to consider taking advantage of.

Recently, there have been many cases where  homeowners have been able to reduce their rates from approx. 6.5 % to  4.90% which is almost a 2 point spread.  A 2% reduction in interest rates can translate into a substantial amount of savings by lowering some monthly payments by hundreds of dollars depending on the size of the loan.

low interest rate fixed mortgage

Another reason to refinance now is that like every good thing, it will come to an end. The predictions are that the rates will start to increase by the summer time. One of the main reasons this may happen is because the current demand for refinancing will eventually drive up the rates once again and those who are considering refinancing but choose to wait , may end up regretting their decision not to pounce on the opportunity when they had the chance.

Mortgage companies are sending the message that there is no real reason NOT to refinance even if you don;t have alot of equity built in your home. The reason is that president Obama has created what is called the ” Make Your Home Affordable” plan. What this does, is that this allows homeowners whose properties have lost value due to the housing crises, to still take advantage of the low interest rates that are currently available.

The plan in a nutshell is designed to offer incentives to mortgage lenders that are willing to help homeowners renegotiate their loans even thoough they have low or no equity.  Mortgage companies have seen their  businesses triple in the past few months are currently having a hard time keeping up with the demand.

Although refinancing may offer savings in the long run, there are considerable costs involved with refinancing a home, so it is always best to consult  your current mortgage broker to find out if refinancing would be beneficial for your particular situation.

Also due to the fact that so many people are refinancing, some of the major banks have not been dropping their rates fast enough, simply because they cannot keep up with demand. So if your are currently holding a 6.0 % percentage rate and have more than 15 years left on your mortgage, this may be the best time to take advantage of these all time low interest rates.

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