Mortgage Rates... Should I Refinance?

At this point in our economy we are experiencing some of the best mortgage rates that we've ever seen. Think back to the 80"s when the rates were in the teens! I mean we're talking about a $1515.52 difference per month in payment! That's gigantic!!

Let me show you how. For both of these example we are going to assume a few things. First, we're talking about a $200,000.00 house. Second, a 30 year term or 360 months. Third, taxes and insurance are assumed at $3000 and $1500 respectively. The difference in the two examples is the rate. The first is today's average rate which is 4.5% and the second is an average from the 80's which was 15%.

When you figure this up at 4.5% you'll have a monthly payment of approximately $1388.37 and at 15% you get $2903.89! That is unbelievable! We're talking about $1515.52 in savings per month! That's $18K a year!! We better be thankful!

So, in my humble opinion today seems like a great time to buy a house or refinance as long as it makes financial sense for you. A few things you'll need in order to make it a good decision are a steady job and the desire to stay in one area for an extended period of time. As always, talk to a professional before you make any decisions as I am not one.

Peace