Should I Refinance My Current Mortgage?
Mortgage rates have been falling dramatically and are now at all time record lows. In fact they’re so low, in many cases homeowners can refinance their mortgage at a reduced rate, pay greatly reduced monthly payments AND pay off credit card debt at the same time. You probably have a few goals you would like to accomplish by refinacing our mortgage. I am here to work with you to determine if it makes sense to refi.
I’ll do a free analysis of your mortgage to see how much equity is available and what your refinancing options are. Even if you have to pay a penalty to break out of your existing mortgage, that cost is usually more than covered by the interest savings. Of course I can help you work the numbers to determine if refinancing is the right thing to do at this time.
Here’s an example of how much a typical homeowner can save by refinancing today. This example is based on a $400,000 mortgage taken out 5 years ago with a 30 year amortization and interest rate of 5.8%. The mortgage was refinanced at 3.95%, and $20,000 was extracted to pay off credit card debt which had an interest rate of 18%.
| Before Refinancing | After Refinancing | Result | |
| Mortgage interest rate | 5.8% | 3.95% | See Total Savings below
|
| Balance owing on mortgage | $370,959 | $390,959 | Amount owed is increased by $20,000 to pay off credit cards
|
| Monthly mortgage payment | $2,330 | $1,812 | Saving of $518 per month
|
| Monthly credit card payment | $600 | Zero | Saving of $600 per month
|
| Total Payment | $2,930 | $1,812 |
Total Savings of $1118 per month
|
| Penalty to break out of existing mortgage | N/A | Approx. three times your mortgage payment | Expense of $6990
|
| Total savings after just one year | $6426 | ||
In this example, not only are you benefiting from today’s lower mortgage rates, you’re replacing HIGH credit card interest with LOW mortgage interest, which saves you even more! Don’t wait until mortgage rates start creeping up again. Give me a call today. I’ll do the calculations and present a plan that can help put you back on the road to financial freedom!