How Much Would You Save If You Refinanced Today?
Posted By tsauthor on August 18, 2011
How much would you save on your loan if you refinanced your home loan today?
Lately, many mortgage brokers, banks and financial websites have been talking quite a bit about how low interest rates have recently fallen. Home Loan Specialists is now posting the lowest par rates since the inception of our company in 2006. However, what do these low rates really mean to you as a Texas homeowner?
Historically, mortgage rates have closely followed the stock market movements. The NASDAQ charts are very well correlated with mortgage bond daily pricing which, in turn, dictates your home mortgage rates. In theory, when stock prices rise inflation is at hand and mortgage rates increase. Conversely, stock market losses signal lower mortgage rates ahead.
The recent nosedive of US stock prices has continued to confirm this relationship as mortgage rates dropped an average of .25% last week. This rate decline was seen in all of our most popular loan programs including the 10 and 15-year fixed, jumbo, and government rates.
Qualified borrowers should give serious consideration to signing the contract and locking in immediately. Now is the time to consider refinancing your current home, buying an investment property, or buying a new home.
Below, we developed a refinance analysis for Texas home owners who purchased a new home in 2006. It is stunning how much you can save over the life of your Texas mortgage!
Be sure to call our office at (832) 286-1600 or email Rick@HLSTX.com for your customized analysis!
Original Loan Information from 2006 (5 years ago)
Original Loan Amount: $260,000
Original Interest Rate: 5.625%
Original Loan Duration: 30 Years (360/360)
Refinance Today – 30-year FHA or Conventional Loan
New Loan Amount: $240,792
New Interest Rate: 3.875%
Old Monthly Payment: $1,496.71
New Monthly Payment: $1,132.29
PROJECTED SAVINGS: $126,963.00
Refinance Today – 15-year Loan
New Loan Amount: $240,792.00
New Interest Rate: 3.375%
Old Monthly Payment: $1,496.71
New Monthly Payment: $1,706.64
PROJECTED SAVINGS: $227,392.00
The borrowers in this example will basically be saving an entire house worth of money if they refinance their already low home loan to a 15-year home loan. Their monthly payments will go up minimally because of the shorter term; however, their projected savings and equity-building opportunity is significant. Can you imagine if you had a Texas jumbo loan what the savings could be?
If there is a borrower that would like to lower their monthly payments, refinancing to a 30-year home mortgage will save them over $350 per month, which equals a $4200 savings per year. With those savings, a borrower could buy new furniture, stash those savings away, do some home renovations, or take a vacation! Plus, they would still be saving a half of a house worth of money in the process!
As we mentioned before, now is the time to look into refinancing your home, purchasing a new residence and even beginning your foray into investment properties. Don’t let this chance pass you by!
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