Knockout Punch? The Economy is Reeling; Refinancing is Dealing

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Like a prizefighter kissing the canvas...

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The economy is down for the count. Will it make it back to its feet? History says yes. In the meantime, there are repercussions to this economic situation that could help you land a financial counterpunch—near record low mortgage rates.

Yes, there is a silver lining amid the gloom of our present economy. With mortgage rates at 37-year lows, refinancing is at peak levels; mortgage applications are at their highest levels in more than five years. Refinancing your home could save you quite a bit of money. Should you consider it?

A few things to think about:

  •  You should have equity in your home. In other words, you don’t owe more than the house
      is worth.

  •  Good credit is a plus for the best rates.

  •  The new rate you’d lock in is at least one percent lower than your current rate.

  •  You plan on staying in your present home for at least two/three more years.

Also, be aware that there will be fees involved with refinancing, ranging from administration and origination fees (points) to title insurance and inspections.

How much could you save?
Consider that on a 30-year, $200,000 mortgage with an 8% interest rate, you would pay $1,468 a month. Now look at the following chart and see the possible savings and amount of time it would take to break even (considering closing costs of $2,000).

Thinking about refinancing? Consider Vantage for your mortgage needs. Call 314.264.5325 or click here for more information.