Is It A Good Time to Refinance?
February 5th, 2010 categories: Mortgages & Finance
In an article on RISMedia.com yesterday called 5 Reasons Why Refinancing May Be a Good Option Now, Bills.com suggests homeowners strongly consider refinancing.
“Low rates and compelling opportunities to refinance into shorter term loans have arrived at the same time as large consumer demand…With some exceptions, a 1/2-point to a 1-point drop in rate will generally make refinancing worthwhile…”
Refinancing from a 30-year mortgage to a 15-year mortgage is a smart idea if you have plans on staying in your home longer and can afford a higher payment.
“The current difference between fixed 15-year and 30-year interest rates is significant, making refinancing into a shorter-term loan a compelling opportunity. This can save hundreds of thousands of dollars over the life of a loan and shorten the time to payoff with sometimes only a slight increase in monthly payment.”
The article also suggests refinancing into an FHA mortgage to pay for home efficiency projects - another good idea if you need to make some improvements but don’t have the cash. Generally, I don’t like the idea of refinancing your home to buy something else. But since these improvements are likely to add value to your home, it’s not the same as refinancing to buy a car or go on vacation - never a good idea.
