Last week, interest rates dropped to their lowest point in 2011. We saw fixed rates as low as 4.375% for 30 years, 4.25% for 20 years, and 3.75% for 15 years. We also saw adjustable rates as low as 2.875%! The current trend in fixed rate mortgages is to pay a little extra and get a 15 year loan instead of a 30 year. What's the advantage? Let's take a look:
If you have a 30 year mortgage of $200,000 at 5% interest, your payment would be $1,074 /mo (Principal & Interest only). If you refinanced that to (or start off with) a 15 year mortgage at 3.75%, your payment would be $1,454 /mo (P&I). For a difference of $380 /mo, you could pay your mortgage off in 15 years instead of 30 and build equity in your home much faster...an extra $21,593 in equity in just 3 years and $37,613 in 5 years. Not only that, but by paying off the loan in 15 years instead of 30, you would save $125,000!!
Sound intriguing? Give us a call or shoot us an email and we'll refer you to a Lender that will help you take advantage of today's low rates!!
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