Monday, August 22, 2011

Refinance Your Mortgage Without “Starting Over” At 30 Years

Refinance Your Mortgage Without “Starting Over” At 30 Years

I found this great blog post from Dan Waterstone and feel anyone looking to buy a home should be aware of its implications.

So, here we go:

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30-year fixed rate mortgage long-term costs

The cost of long-term home ownership is now cheap, cheap, cheap.
Slash Your Long-Term Home Interest Costs

As mortgage rates have dropped this year, so have the costs of homeownership. At every given loan size, bargain-basement interest rates have brought monthly mortgage payments to levels never seen in history.

It's a great time to buy a home. It's an even better time to refinance.

This isn't cheerleading. This is fact. As a homeowner, your "total cost of homeownership" is tied to your mortgage. The higher your mortgage rate, the more interest you pay over time. And regardless of your mortgage interest tax-deductibility, over 30 years, mortgage interest accrues into something fierce .

Lately, though, with mortgage rates down, those long-term interest costs have plunged.

April 2011 : Over 30 years, a new $300,000 mortgage accrues $276,000 in interest
August 2011 : Over 30 years, a new $300,000 mortgage accrues $227,000 in interest

Today's mortgagors will pay 18% less mortgage interest as compared to those from April.

The interest cost savings are even larger as compared to loans from 2009 and 2010. This is why everyone with a mortgage should call a lender regarding refinance. There's a huge potential for savings. And you can't know until you ask.

Click here to get a low interest-cost mortgage quote.
The Reverse Of "Starting Over" With Your Mortgage

I've been writing new loans for a long time and, whenever mortgage rates fall, homeowners tell me the same thing.

"I love these low rates", they say, "but I don't want to 'start over' on my loan. I have 27 years left. Why would I go back to 30?"

It's a common refrain from homeowners, and my answer is always the same. It's all about the math. I tell my clients, "At lower interest rates, you can actually accelerate your payoff. You'll own your home faster. It's the reverse of 'starting over'."

And then I show them the math.

By making your same mortgage payment as always, but on a mortgage with a lower mortgage rate, you can shorten your loan term by a huge number of years. It will be as if your mortgage payment never changed -- you'll just own your home much, much sooner.

Want to see how the math would work for you? Click here to ask me for a rate quote. I'll send real numbers for you to review.
Get A Mortgage Rate Quote

The last time mortgage rates fell this far, they stayed low for just 4 days. This time, they may stay low for a longer period of time, but why risk it? What are you waiting for? Rates are lower than they've ever been in history.

If you own a home -- no matter when you bought it -- give a call to your lender. You could save a lot of interest at today's mortgage rates. Even if you don't think you'll qualify, give a call. It's worth 5 minutes of your time.

Or, click here to get an online rate quote. I love to work with my readers.
Dan Green
About the Author

Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage. Email Dan atdan.green@waterstonemortgage.comor call 513-443-2020.

Thank you Dan. This is very helpful information for first time buyers.

Mark Slade
Keller Williams

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