Thursday, July 28, 2011

Refinancing to Save Money

OK, we've actually got some paperwork here so we can go ahead and refinance our mortgage.  The interest rate dropped a couple times to 3.6something%, but it's pretty much settled at 3.75% for a 15-year fixed rate mortgage.  It would be nice to catch it at the lower rate, but the 3.75% is significantly lower than what we're paying now, and the required monthly payment will only go up about $20.  Like I said before, with the lower interest rate, if we continue to pay what we've been paying each month - required payment plus a bit extra - we will save thousands of dollars.

We have been thinking about doing this for a while, but at the same time we were thinking that we might have to call a Realtor and put the house on the market.  We weren't sure if we'd actually come out ahead, even with the lower rate, because there are a few fees to pay when refinancing - so we'd have to be able to recoup that cost before we'd actually start saving money.  But, we're still here, and FHA Refinance Rates are good, so we've decided to go ahead with it.  It should be pretty simple, since we're refinancing with the same bank and everything - just a matter of going over the paperwork and signing, so hopefully we'll get it all taken care of and locked in at a good rate before too long.  So we can start saving those thousands of dollars.

Now would be the perfect time for active duty military personnel and veterans to look into VA Refinancing to see if the lower interest rates can help save them some money.  They say a 1% reduction can save $100 to $600 per month, which can come in very handy for paying the rest of the bills.  Or, like us, plan to continue paying the same amount every month but reduce the length of the loan and the total amount of interest paid.  Either way, it's definitely worth looking into, but of course everyone has to make the best decision for their families.
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