There are many reasons you may want to refinance your home. But first among them is probably having a lower payment each month. Since you already own a home, and have been making payments, you’re most likely going to achieve this through a lowered interest rate.
Access to Lower Rates
The prevailing interest rates have been extremely low for several years. If you haven’t yet refinanced, now is the time. Interest rates are heavily dependent on the Federal Reserve’s interest rate, and that has gone up a little in the last year and is predicted to continue going up over the next few years. It will happen slowly, but there’s no reason to wait because they are far more likely to go up than down.
- $200,000 for 30 years at 5% is roughly $1,074 per month. But the total interest paid over the life of the loan is $186,512.
- $200,000 for 30 years at 4% is roughly $955 per month. But the total interest paid over the life of the loan is $143,739.
If you financed your home with a 30 year loan at a 5% interest rate, and now qualify for 4%, you could see a lower payment by about $120 each month! And what’s more? You’re going to save over $40,000 in interest over the life of the loan. That’s some serious savings.
Higher Credit Score
You might also have achieved a higher credit score through diligent payments, increased income and access to credit, longer credit history, or all of the above. If so, congratulations! You’ll find financing for all sorts of things is easier now.
- $250,000 for 15 years at 4.5% is roughly $1,912 per month. But the total interest paid over the life of the loan is $94,247.
- $250,000 for 15 years at 4.0% is roughly $1,849 per month. But the total interest paid over the life of the loan is $82,860.
If you financed your home with a 15 year loan at a 4.5% interest rate, and now qualify for 4%, you could lower your payments by $60 per month. It might not seem worth it. But it is. Because you’re going to save almost $8,000 in interest over those 15 years. That means you’re accumulating equity faster and saving some real money for retirement… or a boat.
How We Can Help
At McLellan Financial Mortgage, we have access to a wide range of lenders, which gives you more choices and possibly access to a lower payment. Even with all the savings, going through the process of refinancing might sound like a lot of work, but we’re here to help it go smoothly. Because at McLellan Financial Mortgage, we do more than close loans. We open doors.
See If You Qualify
If you like saving money over the long term, refinancing a mortgage could help you do just that. Give us a call to review your loan and see if you qualify for a refinancing package that could save you thousands!