The Current Craze Around Refinancing Explained
Like many experts in the mortgage business, the team at Local Mortgage in Colorado has recently been talking to everyone we can about refinancing. We just can’t get over the low interest rates and savings that are possible. Honestly, we think this craze is something you should consider getting behind, too.
In today’s blog, we will go over the trend of mortgage interest rates, briefly discuss what refinancing is, and talk about the tools Local Mortgage has for you to use. If you want a longer blog focused on the process of refinancing itself, then you should check out our post on understanding refinancing. The experts at Local Mortgage are here to help you lower your monthly payments and get ahead on your mortgage.
The Trend of Mortgage Interest Rates
Before diving into refinancing itself, it will first be beneficial to look at the trend of mortgage interest rates. Perhaps looking for what makes the current housing market unique will help us understand why so many people are talking about refinancing now.
To look at the trend of current mortgage rates, we need to see the average interest rate on mortgages over time. For this, we suggest using this federal research and economic data (FRED) from the St. Louis Federal Reserve. Luckily, any data from FRED is already represented in graphic form for anyone to see the trends.
In the case of 30-year fixed rate mortgage interest rates, we saw average interest rates close to 19% in the early 1980s. Since then, interest rates on mortgages have steadily fallen, with some short periods of increases mixed in. In the early 2000s, rates stayed above 5% and they have fallen since.
This leads us to today. At this point in time, many interest rates on mortgages hover around 4%. Compared to the interest rates of the past two decades, this is a really great rate for those borrowing money, which makes it easier to get into a fantastic home with a manageable monthly payment.
The current average interest rate is the primary reason you hear so many mortgage experts talking nonstop about refinancing. These historically low rates give future borrowers a fantastic chance to get into their dream home, and help current borrowers save money.
What Is Refinancing?
If you recently took out a mortgage for your home at a rate higher than the current averages discussed previously, then you might find yourself feeling frustrated. This is a perfectly understandable reaction, especially since we all hate losing money on interest for loans. Thankfully, refinancing is a great option for many people in this situation.
Refinancing allows lenders to take out new, lower interest rate loans in replacement of their current loans. This is a great option for people with high monthly payments on their mortgages, as well as people tired of paying a lot for the interest on their loans. As previously mentioned, see our post on understanding refinancing for a more in depth analysis of the process itself.
The Tools We Have To Help You
Perhaps you are not sure whether refinancing your mortgage would be a good financial decision for you. In that case, the team at Local Mortgage is thrilled to help. To get you started, we developed some tools for you to use.
Our refinancing calculator is a great place to begin figuring out whether refinancing might be right for you. We wrote a whole guide to ensure that you can use this calculator to its fullest capabilities. The calculator on our site is a great way to tell how your monthly payment and amount of debt could change by refinancing.
We also developed calculators to help our clients determine how much they can save by buying their home, and what potential monthly payments on mortgages might be. These tools are not intended directly for those looking to refinance, but they allow people to see the financial power of low interest rates on mortgages.
Finally, our team is available to answer any questions you may have about refinancing. We try to give you answers to the most common questions through our site and blog, but many times a little more guidance is needed. Feel free to contact us with any questions that arise.
Choose Local Mortgage
We hope that you have a better understanding of the craze surrounding refinancing. We know that the historically low interest rates in the housing market get us excited to help people save money on their mortgages! Hopefully, you are joining in on the craze yourself and considering refinancing your mortgage.
If you do decide to refinance your mortgage, then remember to use Local Mortgage. We will help you as much as you want through the entire process, and help you get the low monthly payment you deserve. You can apply to refinance here when you are ready to do so.