Oct 24, 2019
If you're a homeowner and haven't noticed what's been happening with mortgage rates, it's time to start paying attention.
Rates recently took a nosedive, plunging to the lowest levels in years. Though they've bounced higher in the last few weeks, mortgages are still a huge bargain compared to a year ago, with rates on 30-year home loans lower by more than one full percentage point.
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If you have a mortgage from 2018, you might have a good opportunity to refinance. Refinancing is all the rage: The Mortgage Bankers Association says lenders are receiving more than twice as many refinance applications as they were last year at this time.
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Take a look at the potential savings through a refinance in your state.
Begin by selecting your state from the list below:
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
But, should you refinance?
Freddie Mac has said that homeowners who refinanced earlier this year are saving an average $140 a month or $1,700 per year.
Refinancing can be a very wise financial move, but a few questions will help you determine whether it really makes sense for you:
- What's it going to cost you? Trading in your old mortgage for a brand-new one means you'll have to deal with closing costs all over again — and you can expect to pay closing costs averaging $5,779, says the real estate data firm ClosingCorp.
- How long do you think you'll be in the home? It could take at least a couple of years for you to recoup your closing costs with the savings from your refi. If you can imagine yourself moving in a year or two, then refinancing probably isn't worth it.
- Will your existing mortgage give you an out? Some mortgages come with prepayment penalties that can cost you thousands of dollars if you pay off the loan early, typically within the first three or five years. You'll want to check with your current lender.
- Has your credit gotten worse? If you've been late with your bills recently or have otherwise fumbled with your credit, refinancing is a moot point because you're not likely to score one of today's ultra-low mortgage rates. So, get to work on cleaning up your credit.
What kind of answers did you come up with? If you think you had all the right ones and are now convinced that a refinance is the right move, then start by taking a look at today's best mortgage rates where you live.
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Doug Whiteman was formerly the editor-in-chief of MoneyWise. He has been quoted by The Wall Street Journal, USA Today and CNBC.com and has been interviewed on Fox Business, CBS Radio and the syndicated TV show "First Business."
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