When Interest Rates Fall, When Does It Make Sense To Refinance? – Stress Free Mortgage

We are all hearing the news that the federal government is going to be cutting interest rates this fall, and many believe that means mortgage rates in turn will be lower. While this may seem like a logical conclusion, it is not necessarily the case. Mortgage rates are determined more so by the economy than anything else.
That being said, as rates do go down, homeowners will likely receive many offers to refinance. Some of these offers may be deceiving regarding how rates and costs are shown for comparison. Unless you know what to look for, you could end up paying thousands of dollars for an interest rate that may not save you more money in the long run, but looks great on paper!
When you are looking to refinance to a lower interest rate, it’s important to look at the cost of the refinance and what you will really save both monthly and long term. What does that mean? It has often been said that unless a homeowner can lower their interest rate by 2%, there is no benefit to a refinance. This may have been the case when home prices were much lower. However, from our purview, lowering a client’s interest rate by as little as .25% can save hundreds of dollars monthly, which can really add up in the long run. These numbers vary depending on your loan amount.
With so much advertising out there, having someone that is looking out for you and your best interests is critical. At Stress Free Mortgage, we will be honest with you about refinancing, and we will get you through the process, stress free! Please call our office if you have any questions: 661-295-0555.