Watching Your Wallet: Why this is the right time to refinance
With interest rates still low, it is more affordable than ever to borrow money.
With rates hovering around 3.5%, many homeowners are in a position to refinance and lower their monthly cost, and if you've ever wondered what that process looks like, listen up.
One of our Watching Your Wallet producers recently refinanced her home. She expects to live there a few more years, but not many, so she jumped at the chance to save some money on her monthly payment.
She opted to use CAP Center to refinance her mortgage, that way, there were no upfront costs. Those are built into the loan plus her appraisal was waived.
She filed her application online. After gathering and submitting the necessary paperwork, she was offered a new quote.
Her current rate is 4.625%. Her new rate is 3.625%, an entire point lower.
Based on what she owes on the home, her monthly payment will drop $160.
If you refinance and have to pay those fees upfront, do the math and make sure it's worth it.
Many lenders charge 3 to 6% of the principal to process the loan and that can take years to recoup those costs.