Refinance Loans Recently the Real Estate
Market has slowed down a little. Despite some financial analysts predictions
the market is a bubble which is about to burst, the industry remains strong.
People who purchased homes in the past ten to twenty years have seen huge
increases in the value of thier homes. Typically, the average home gains
approximately 5% of its value annually. Recent record low interest rates
have led to many additional home sales. With so many buyers the value of
real estate has gone way up. Many homes purchased within the past couple
of years have increased in value by up to 40%! You may still be able to
get a lower interest rate and save thousands of dollars.
Some Reasons why Refinancing
should be considered. Variable rates Increasing Many of the loans during
this low interest rate period were variable rates. Now the market is cooling
off a bit and the interest rate (for variable loans) is starting to rise.
Small increases in the rate result in substancial increases in mortgage
payments. Now is the time to get a lock into a fixed rate before the variable
rates continue to climb.
Equity and PMI If you have recently purchased
a home, chances are the value of your has increased. In order to disgard
PMI insurance you normally have to have at least 20% of your loan paid
off. With the increased home value you may have already reached the 20%
in equity. The PMI cost varies according to each home value, but on a $200,000
mortgage PMI costs are around $151.00 per month. Refinancing now with 20%
home equity could instantly drop your monthly mortgage payment by $150.00
(even more for higher priced homes). If you can also lock into a lower
fixed interest rate you could literally save hundreds.
"I purchased a home three years
ago for $179,000 with a fixed 6.7% interest rate. Like you said on your
site the PMI insurance was an additional $150.00 per month. Including taxes
my monthly mortgage payment was about $1,700. I refinanced and locked into
a amazingly low rate of 4.8%, the home appraisal showed a 30% increase
in the house's value (over 20%) and I was able to drop the PMI insurance.
Things worked out perfectly, my mortgage is lower, no PMI insurance, and
I have $120,000 in equity! My monthly payments dropped to $1,200!! That's
$500.00 more per month I can use for other things or drop onto the mortgage
principal to payoff the loan faster. Thanks!!"
