Just when we thought rates couldn’t go lower we saw another dip at the end of May.  With stocks oversold, we have seen a change in direction for mortgage backed securities and rates have increased again.  Even with taking that into consideration, rates still remain near all time records for lows but the forecast is that we can’t expect these conditions to remain.  Now is the time to make these low mortgage rates work for you.

Maybe your top concern is monthly cash flow.  With a down economy with high prices for virtually every commodity it can get harder and harder to make ends meet.  Maybe you have dipped into your savings in the last few years to get by and are ready to start replenishing your emergency fund.  Maybe the kids just got accepted to college.  What ever your reason, the most common reason to refinance is to save on a monthly basis.  As an example lets use a $175,000 mortgage.  At 7% the principal and interest payment would be $1164.28, at 6% it would be $1049.21, at 5% it would be $939.44, and at 4% it would be $835.48.  Depending on where your current rate is you could be saving over $300 a month.  What type of impact would this have on your finances?

Maybe your financial goal is to pay off your mortgage quicker.  There are two ways to accomplish this.  First we can put you into a shorter term mortgage.  Having a shorter amortization period will make your monthly payment go up in most cases but with a big reduction in interest rates that will absorb a sizable portion of that.  If we return to the previous example and we say that you have a 30 year mortgage at 6%, your payment is $1049.21.  If we take the same amount and drop it to a 15 year mortgage at 3.5%, you can pay off your mortgage in half the time for an additional payment of $201.83 (payment of $1251.04).  If you don’t want to be forced into the higher payment but want to shorten, we can drop your rate and put you into another 30 year mortgage but you can continue to make the same payment.  The savings amount under this premise would be applied directly to the principal of your mortgage you can take a considerable amount of time off or your mortgage as well.

Is your retirement plan to retire at a cabin or beach house?  Is your retirement plan to buy more real estate for rental income?  Just because you already own a home doesn’t mean that it isn’t a buyer’s market for you too.  Home prices, especially investment properties and typical second home areas, are depressed and the cost of money is inexpensive.  Your best bet maybe to refinance for cash flow or cash out on your primary residence and use the additional funds towards making your future real estate dreams come true.

Want help with achieving your financial goals?  Give us a call for your free personal evaluation.