Interest rates have dropped! In December of 2018, the interest rates for buying a home were 5%- and they are currently down to 3.5%. That’s a HUGE drop!
This drop has some people considering refinancing their home. Should you??
The real question is- how long do you plan to be in your home? If it’s longer than 5 years, chances are it’s money saving to refinance.
Let’s say you bought a $300,000 home, no money down, at a 4.7% interest rate. Your full payment would be 1750 or so. If you got your interest rate to 3.5%, then your payment would drop to about 1550, saving you about $200 a month.
Now, before you jump to it- there is a cost to refinance. Usually around $6000, in this case (which gets rolled into your loan). It would take 2.3 years of paying on your home for your savings to match the cost of the refinance. So, if you plan to stay in your home much longer than 2.3 years… it’s definitely a money saver (especially if you are able to drop your mortgage insurance by refinancing!).
Questions about your specific home numbers? Message me today!