Mortgage rates greatly influence a family’s decision to either purchase a home or refinance their current mortgage. High mortgage rates can discourage people from purchasing a home and gives little incentive for homeowners to refinance their current mortgage. Fortunately, mortgage rates have been improving all year and are now near a record low, meaning excellent news for both potential home buyers and current homeowners.
Your primary goal is to achieve the best interest rate while keeping your monthly payments at the lowest possible price. Now is the opportune time to take advantage of low mortgage rates as current rates are reaching record lows, hitting some of the lowest levels in decades. In July 2012, mortgage rates have dropped 3.49% alone. Don’t let the low percentage difference fool you, if you’re current mortgage rate is only 1-2% difference, the money you will save will be reflected in long term savings.
Determining the length of stay at your current home can help you decide whether you want to refinance your mortgage. If homeowners are committed on staying at their current home long term, should highly consider refinancing. This is not to say that everyone should refinance their mortgages. On the other hand, homeowners who do not plan to stay at their current home for an extended period of time are recommended to compare the closing costs of refinancing to how much they will save every month with this new rate.
Potential home buyers should consider buying a new home in the near future while mortgage rates are at historical lows. Within the next few years, mortgage rates are expected to rise and the current rates may not decrease significantly. It is important to take into consideration that the home buying process can potentially take months, so act now to take advantage of these record-low mortgage rates!
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