Dec 20, 2008 5:35 pm US/Eastern
Low Mortgage Rates May Mean Time To Refinance
(CBS)
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The national average on a 30 year fixed mortgage is 5.17 percent, and on a 15 year mortgage, it's dropped to 4.92 percent.
AP
If the interest rate on your current home mortgage is above 6.00 percent then you might be able to save thousands of dollars by refinancing your mortgage.
That's because we are hitting record lows in home mortgage interest rates.
Rick Mongiovi, of Kennedy Township, just refinanced his home at a very attractive 5.25 percent rate, but now he wishes he had held off a little longer.
"After I found out today and the last couple days, I guess the rates are down under five, I should have just waited another month and a half and would have got a better deal," he said today.
That's because home mortgage interest rates haven't been this low in decades.
The national average on a 30 year fixed mortgage is 5.17 percent, and on a 15 year mortgage, it's dropped to 4.92 percent.
Jim Martin is vice president of the Pennsylvania Association of Mortgage Brokers, and he says there's never been a better time for homeowners to refinance their mortgages.
"I think it's a fantastic time," says Martin. "We are seeing the market move in such a favorable direction that we have not had rates at this level in 50 years."
Mortgage rates in the 4.0 to low 5.0 percent range make refinancing attractive to anyone with mortgage rates above 6.0 percent.
"Generally speaking, if you're saving one percent on your rate -- if you're at 6.0 percent or 6.50, and you can get a 5.50 percent or even lower, then on a $100,000 loan, you're looking at about a hundred dollars a month in savings," adds Martin.
Mortgage advisor Justin Police says it's also a good time to consider debt consolidation and get rid of those adjustable rate home equity loans by wrapping them into one refinanced mortgage.
"Right now with rates being so low, you can fix it into a good rate. So you might have a home equity loan that is comparable rate, but you can fix it and not worry about it ever adjusting when rates do go up," notes Police.
But there will be closing costs, usually around two to three percent of the mortgage loan that you can either pay up-front or wrap into the mortgage.
And the best rates are for those with the best credit scores, although there are better rates for almost everyone.
Finally, do some comparision shopping -- start with whoever has your current mortgage -- and then check out rates through a mortgage broker.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
Timeline: U.S. Credit Crunch & Financial Failures
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