Should You Consider Refinancing Your Home Mortgage Loan?
With home mortgage interest rates in Georgia and around the country trending near record lows, many homeowners are considering refinancing their home loans. Real estate market experts say that home owners should consider refinancing their mortgages if the new home mortgage payment will be lower than their old one, and they will save money over the term of the mortgage. Borrowers should be aware, however, that a lower mortgage payment can sometimes add years to the payoff timeline. For example, if a borrower with fifteen years remaining on his or her existing thirty year mortgage refinances to a new thirty year mortgage, they will lower their monthly payment but also increase the number of years they will have to pay. If possible, borrowers in this situation should refinance to a mortgage with a shorter term, i.e. to a ten or fifteen year mortgage.
Borrowers should also carefully examine the costs involved in refinancing a home mortgage to make sure refinancing still makes sense. Home owners who are planning to sell their homes in the next couple years may be better off skipping refinancing. For example, with a refinance that saves $125 per month but costs $3,500, a borrower will need to stay in the home for at least 28 months to recoup the money spent on the refinance. If the home is sold before that time, the borrower would actually lose money on the refi.
Should you consider refinancing your home mortgage loan? Contact Peachtree Mortgage Services, Inc. at peachmtg@bellsouth.net or 770.481.0052 to discuss your situation.
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.