When The Hubby and I bought our house several years ago, we thought our 6% fixed APR rate was decent. And, for that time, it wasn’t bad, especially since we were new homeowners who couldn’t put down a very big deposit. (We just missed the first-time homebuyer’s credit that went into effect in 2008, which drove us nuts!)
But if you’ve been following real estate or financial news at all, you’ll know that as rates have been dropping and dropping lately, we’re actually sort of getting fleeced now with our once-decent rate. And for someone who will squeeze the last ounce of toothpaste out of the toothpaste roll, that just cannot stand. 🙂
Is now the time? Looks like it…
The national average for home loans is hovering between 3-4% APR at the moment (closer to 3.5% at the time I’m writing this), meaning we’re paying a few hundred dollars more per month than we need to be. A few hundred dollars more!
Which is why we’re gathering all our paperwork together to do some serious online research into our refinance options which may include home improvement loans. Because we’ve been on-time with our monthly mortgage payments, we’re both making better salaries than we were when we first bought our house, and we’ve made some improvements to our house over the years, so we should be in a good position to qualify for one of the new lower rates.
If you’ve been in your home for a while (and plan on being in it for several years yet), you may want to look into your refinancing options, too. Who knows how long rates will stay so low, and if you can save hundreds per month, why not do it?
Have you refinanced recently? How much lower were you able to get your payments?
photo credit: Images_of_Money
We refinanced our home with ING a year ago (before they became Capital One 360). We were able to lock in a ridiculous 2.55%… but this loan has many catches that we were well aware of and didn’t mind. For instance, a biweekly payment schedule, required to escrow for yourself, and the loan, while amortized over 30 years, is only good for 5 years. Meaning, if we do not pay it off in 5 years, we must refinance. The plan is to have it paid off next year, 2 years early. We got lucky with a mortgage that most people would definitely NOT want.
Wow. You’re really lucky in that you were able to find a way to work with the loopholes and game the system! Well done!
Yeah, just be careful with the fine print.
I had a friend who had her house mortgaged with Chase I think, and they wouldn’t let them refinance their house unless they missed so many payments. So the bank basically told her to miss payments on purpose so they could refinance. So they did. Well…. turns out they still didn’t get to refinance and now they are in a heap of trouble with credit and foreclosure for missing payments. The banks can be pretty sneaky.
Yikes. Yeah, you really have to be careful. Although I wonder if maybe he has some sort of Better Business Bureau claim against Chase for that? That definitely does not sound legit.
Your situation sounds a lot like ours was. We bought a house at a decent interest rate, and then when the rates plummeted, we felt like we were getting ripped off. So, we ended up paying about $2000 in penalties, but got a 2% decrease in our interest rate. It ended up being worth it for us to change it despite all the hassle.
That’s what we’re hoping. The upfront costs of refinancing should pay for themselves over the long term of lower payments.
Just refinanced our mortgage. We went from 5.7% to 5.42% plus we now get an offset account 🙂 For those of you wondering why that rate is so high its because I’m in Australia. That 5.42% rate is actually lower than the banks employees can get because they messed up the figures during the paper work lol Also if you’re thinking that rate is high, just have a look at some of our property prices! FHBs quite regularly take out $500,000+ loans and I’m not talking about super rich ones either, average engineers or software dev type people… crazy crap…
Wow, I hope someone messes up the paperwork during our refi! 🙂