The recession is going to end soon and the economy is showing signs of leveling off according to the sentiments voiced by central bankers from all over the word on Friday so it may be a good time for refinancing mortgage loans.
Mortgage rates for 30-year fixed loans also fell this week to the lowest level since May according to a report from Freddie Mac. Many people are keeping an eye on mortgage refinance rates especially if they have high credit card debt or outstanding loans at very high interest rates.
Fluctuating interest rates on mortgages show that there is a measure of confidence returning to the economy in general. This does not mean that we have swung back into a boom and you should run out and refinance loans without taking a close look at your options.
Caution is never misplaced in this type of economic environment but when it comes to refinancing your mortgage, it may be a wise decision if the end result is a lower monthly payment and it substantially reduces your exposure.
There is still a high level of debt hanging around and any refinancing today which enables you to escape financial hardship by consolidating outstanding loans, will pay off for you tomorrow.
One of the main things to understand when consolidating your finances is not just your monthly payment. You must make sure the total amount of interest you will pay over the term of your refinanced mortgage represents a saving.
What this means is, if you have credit card debt which is at a high rate it may be a no-brainer to consolidate. If your car loan is is at a low rate it might not be a smart idea to pay it off from money obtained from a refinance of your home mortgage.
Refinancing your mortgage can usually work to your advantage if you are in a good equity position and you take care to pay off any debt which in the long term still saves you money on the interest. Don't forget to do the math and consult your bank.
No comments:
Post a Comment