If Your Mortgage Is Not Three Percent Or Lower

In these days of low home loan interest rates, you should look seriously at doing something if you do not have a mortgage rate below three percent. Now is the time to refinance your home loan. Even if you have an FHA home loan or even a jumbo home loan rates are low and now is the time to act.

If you have at least 20% equity in your home and preferably even more, you can get extremely low mortgage rates if you do a mortgage refinance.

Fixed Rate vs Adjustable Rate Mortgage

Many homeowners bought homes using an adjustable rate mortgage. Now the rate is recasting and the payment is going up.The fear is not a small increase at the end of the 1st 3 or 5 years, it is the future rate and what the mortgage payment might be.

But, instead of paying the fixed rate you have been paying a reduced rate for the last say 5 years. Let’s say that saved you $100 a month on your house payment. That is $5,000 you just saved. if your adjustable payment goes up you have years before the savings are offset.

The bad mortgages are the ones called ‘Neg Ams”. These actually started you with a payment way below what it should have been to get you in the home. Now you have to start paying the shortage. Those type hurt. 

Don’t be afraid of an adjustable rate mortgage. It may be your only option or it may be just the best option for your situation. Just be sure you get a 5/1 arm so the payments are at a fixed amount for the 1st 5 years. Most adjustable refinance rates are running below 3% right now.

15 Year vs 30 Year Mortgage

By all means do the 15 year mortgage if you can afford the payment. In a perfect world, you got an adjustable rate mortgage when you bought the home. Hopefully, you have had time to save some money and also build up some equity in your home. Now you refinance to a 15 year loan. Yes, the payment will be higher but the rate on a 15 year home loan are below 3% in most cases right now.

That low rate can save you money and on a 15 year mortgage, you are cutting the time to own your home in full in half. We just completed a home loan refinance Santa Clarita and the borrower say the payment only go up $200 a month but cut the payoff time in half. Use our mortgage payment calculator to find your mortgage payment amount.