As a rule many people believe a good time to refinance a mortgage is when you are getting a home loan rate of 1% or lower. So if you were at 7% interest rate you would not want to refinance until you could get a interest rate of 6%six percent. As a rule of thumb this is a good rule but not all ways. Sometimes It might not be worth it to refinance. Visit Denver Home Mortgage for more information
Here is a example of when it does work. Lets say your home value is about two hundred twenty thousand dollars or better yet this is your mortgage amount. At seven percent this would give you a home loan payment of about $1496 per month. Of course this is just the loan payment and does not included the taxes and insurance. Now, we would have a new payment of about $1348 per month. Get the details at Denver Mortgage Loans
So we would have a huge savings of about One hundred forty eight dollars. That does not seem like a big number but when you add this over the life of the home loan it is about fifty three thousand two hundred and eight dollars. So it can really add up. That is if we stay in the home the full thirty years. If we move in a year it will not make any sense at all. For more detail visit Denver Mortgage Loans
We all so need to take into consideration the fact the refinance is going to cost some money. The average closing cost on a loan amount of $225,000 is going to cost around $5000. We want to be in the new loan long enough to make up this cost. So we will need to be in the home at least three years to make up for the cost of the refinance. View this information for free at Colorado Springs Home Mortgage
It does not all way make sense to refinance 1%. If we have a very low ,mortgage for example, of $75,000. We use the same example of going from 7% to 6%six percent we are only looking at a savings of about $45 per month. It would take over 8 years to make up for the closing cost. Unfortunately the closing cost is still around $5000. Even if the loan amount is so small. For more information please visit Denver Mortgage Loans
So when is a good time to refinance that mortgage?
As a rule many people believe a good time to refinance a home loan is when you are getting a home loan rate of one percent or lower. So if you were at 7% interest rate you would not want to refinance until you could get a interest rate of 6%. As a rule of thumb this is a good rule but not all ways. Sometimes It might not be worth it to refinance. Visit Denver Home Mortgage for more information
Here is a example of when it does work. Lets say your home value is about two hundred twenty thousand dollars or better yet this is your loan amount. At seven percent this would give you a home loan payment of about $1496 per month. Of course this is just the loan payment and does not included the taxes and insurance. Now, we would have a new payment of about one thousand three hundred forty eight dollars per month. Get the details at Denver Mortgage Loans
So we would have a huge savings of about One hundred forty eight dollars. That does not seem like a big number but when you add this over the life of the mortgage it is about $53,280. So it can really add up. That is if we stay in the home the full thirty years. If we move in a year it will not make any sense at all. For more detail visit Denver Mortgage Loans
We all so need to take into consideration the fact that we will need to pay money to refinance the home. The average closing cost on a home loan amount of two hundred twenty five thousand dollars is going to cost around $5000. We want to be in the new loan long enough to make up this cost. So we will need to be in the home at least 3 years to make up for the cost of the refinance. View this information for free at Colorado Springs Home Mortgage
It does not all way make sense to refinance 1%. If we have a very low ,mortgage for example, of $75,000. We use the same example of going from 7% to 6%six percent we are only looking at a savings of about forty five dollars per month. It would take over 8 years to make up for the closing cost. Unfortunately the closing cost is still around $5000. Even if the loan amount is so small. For more information please visit Denver Mortgage Loans
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