The Loan Lady Blog

Interest rates have been at unbelievably low levels all summer.  Since May, 2010, rates have lingered below 5% due to a sluggish economy.  Most of the loan files I am working on right now are for clients who want to refinance.

If you are a homeowner, have you taken a look at refinancing yet?  You can get a lower interest rate, a different loan term, or take cash out if you have enough equity.

For example, homeowners who know they will be moving within 5 years can take advantage of  a 5 year Adjustable Rate Mortgage (ARM).  The interest rate would be fixed for 5 years at a rate that is lower than the traditional 30 year mortgage.

Some owners are refinancing to 15 year loans, also at significantly lower rates than 30 year fixed.  The shorter term increases your monthly payments, but the lower interest rate can offset some of that increase.  This type of loan is for owners who are financially able to qualify for the higher payment and want to get their loan paid off faster.

For any refinance, make sure you work with a reputable mortgage loan officer who will analyze the costs versus the benefits, and not just advise you to refinance so he or she can make a commission.

So if you are a homeowner who does not have an interest rate below 5%, why aren't you refinancing?