Anyone who has picked up a newspaper or turned on the news in the last couple months knows that the economy is not in good shape.Â Unemployment remains close to 10 percent, foreclosures are up across the country, consumer sentiment is down, and nearly everyone is predicting that home prices will drop in the coming year.
Despite this, you may be able to use the economic downturn to your advantage.Â Every day, multitudes of people are saving money by refinancing their mortgages.Â Credit can be tight right now, but for those that qualify, there are plenty of reasons to get a new mortgage.Â Here are five of them:
1.Â Mortgage rates are at an all time low.Â As of last week, the average mortgage rate on a 30-year fixed rate mortgage was 4.49 percent.Â This is the lowest since Freddie started doing mortgage rates surveys and likely the lowest rate since the 1950s.Â These low rates are largely due to the financial crisis in Europe, the flagging U.S. economy, and Federal Reserve policies.
2.Â By refinancing you may be able to save thousands of dollars in interest payments over the course of your mortgage, and you may be able to save hundreds of dollars on your monthly payments.
3.Â You may be able to shorten the term of your mortgage while keeping the same monthly payments you have now.Â By shortening your mortgage from a 30 year fixed rate mortgage to a 15 or 20 year plan, you might be able to save thousands of dollars in interest payments and pay your house off much more quickly.Â Additionally, because rates are so low, you may actually have similar monthly payments to what you had before refinancing (depending upon your previous rate of course).
4.Â You can often refinance with no closing costs.Â Current mortgage rates are so low that borrowers can often refinance without paying closing costs.Â Most people are a little strapped for cash these days, and any opportunity for savings is welcome.Â Refinancing without paying closing costs is a great option for those that qualify for a new mortgage but donâ€™t have much cash on hand.
5.Â Switch from an adjustable rate mortgage (ARM) to a fixed rate mortgage to reduce future interest rate risk.Â When you have an adjustable rate mortgage, you run the risk that mortgage rates will increase in the future, and that your mortgage payments will increase with them.Â Some people are able to manage the interest rate risk, but for others who are looking for more stability or are planning to stay in their homes for the long term, fixed rate mortgages are preferable.Â If you had an ARM and are looking to move to a fixed rate mortgage, now could be the time.
Total Mortgage offers some of the lowest mortgage rates available and has multiple refinance plans with no closing costs for qualified borrowers.Â Call us today at 1-877-868-2509 to explore your options with one of our certified and licensed mortgage bankers.