If you have purchased or refinanced a home in the past 10 years, odds are you probably have a pretty good mortgage rate. Rates have been at all time lows for quite some time, but depending on when you locked in your rate it might be a good time to consider refinancing.
For example, if you secured a $300,000 mortgage in 2010 at 4.75% you probably think you have a good rate and are “in the 4s somewhere” and don’t need to take a second look at that part of your financial plan. Your principal and interest payment is $1,565 per month and you have 21 years left. Not bad.
But it could be better. Odds are you could either lower your monthly payment or you could accelerate your payoff schedule with a lower interest rate or a shorter mortgage term. Mortgages don’t just come in 30 year and 15 year varieties. You can build a mortgage schedule and repayment plan when you refinance that aligns with your financial plan. Want to be debt free by 55? You can probably refinance into a 20 year mortgage to have a lower required monthly payment but continue to pay your existing higher payment to accelerate principal payments.
Because rates continue to be low (15 year rates are at 3.00% as of 9/6/19 Source: Wells Fargo) it could be a great time to revisit this part of your financial plan. We just refinanced our home. We got the advice to do so from a great financial planner 😉
This information is provided for general information purposes only. Please consult a professional regarding your individual situation.