Lender411.com Articles Refinance

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With rates having been so low for so long, many people I speak to already have "a low rate." Consequently, many of them are hesitant to take a few minutes see if they could benefit from even a small drop in their interest rate. Even though it may not seem worth it to look into your refinancing options, you really should address your mortgage financing at least annually to make sure it is still meeting your needs - and *take* a few minutes to talk to your loan officer if rates have dropped even slightly.

This point was underscored recently with a past customer of mine, who are four years into a $250,000 loan on a property that they plan on living in "until they die" (their words). The current rate environment allows a refinance that would drop their interest rate a modest 0.375% . Refinancing their remaining balance at the lower rate saves them approximately $130 per month. Now that may not seem like a lot, but it's about 10% of their mortgage payment, and more importantly it gives them options that they never knew they had. For example, they could:

1. Refinance and continue to pay their "old" mortgage payment (i.e. effectively adding $130 in principal) each month, and it would shorten their mortgage payoff period from 26 years to 24 years.

2. Invest an additional $130 per month with their financial advisor

3. Have an additional $130 per month available in their budget.

This particular couple is opting for door #1, as their retirement accounts are already well funded, and paying off their mortgage off two years faster will allow them to retire sooner that they anticipated.

In short, you might never know what your options, and you might miss out on a great deal if you don't periodically review your mortgage situation with your local mortgage professional.

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