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January 3, 2012

Is It Time To Refinance Your Mortgage?

Mortgage rates have been apopular subject in the last year, and for good reason.  Mortgage rates areat all time lows.  A 30 year mortgage is currently around 4%, and 15 yearmortgages are around 3.5%.  Refinancing your mortgage can result inhundreds of dollars in savings every month.  For example, a mortgage thathas a balance around $150,000 at 5.5% would have a monthly payment of around$852 a month for principal and interest.  If you refinance thatmortgage to a 4% 30 year rate, the payment would be $716 a month.



A lot of people are findingit difficult to refinance, and that is due to the banks trying to cover theirrear ends.  The banks lost billions due to the housing market crash in2008, and they continue to lose even 4 years later.  The government hastried implementing ways to help people refinance, and recently they have madechanges that will help even more people.  Housing Affordability RefinanceProgram, or HARP, is a program intended to help those who owe more on theirhome than it is actually worth.  They originally allowed homeowners torefinance their mortgage if the loan to value was under 125%.  That meansthat if your house is worth $150,000, and your mortgage was $187,500, you wouldstill be able to refinance.  Just recently the government lifted the 125%restriction, allowing homeowners to refinance regardless of how upside downthey are.

If you have a mortgage andyou feel that your rate is too high, call you mortgage holder to see if you cansave on your rate.  Be ready to go through hurdle upon hurdle to getthrough with the refinance.  Banks now require a lot of information suchas statements of all your accounts, credit check, extensive incomeverification, title checks, and an appraisal in most cases.  In the endthough, it will all be worth it.

Filed Under: Mortgage

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