Phillips Law Center PLC Discusses Low Mortgage Rates

Oct. 22, 2012 - PRLog -- As a homeowner, you probably watch the mortgage rates and are astounded at how low they have dropped. Perhaps you bought a house several years ago and thought you got a pretty fair deal on your mortgage terms. Now you wonder if you could reduce your home payments, and how. With these questions in your mind, you decide to talk to a mortgage broker.

Getting professional help with your mortgage is a smart first step in seeing if you have any refinance options. This is the person that can look at your payment history, credit score, and even the value of your home and help you decide if the process is worthwhile. This is a process that may create more money for you each month when you refinance, or you may not come out ahead at all. The professional broker can give you the advice and numbers to crunch so you can see what things will actually cost. Sure, it can sound great to refinance and have a lower monthly payment, but after you factor in the costs of the refinance, it may not make financial sense to move forward with it. http://www.phillipslawcenterplc.com

The cost to refinance may outweigh the benefit of the refinance itself. When you decide to explore your refinance options, you may see that you can get a lower rate. The lower rate is very appealing, especially when you continuously hear about the rates being historically low on every news channel and website. The pressure to refinance can be high as you think you are making a wise decision to lower monthly payments. With lower payments, you can pay off more of your mortgage each month. With lower payments you could do some home improvement projects. The lists go on and on with the possibilities of some money freed up each month. You have to look at the situation objectively and crunch the numbers. If the fees to refinance cost you more than you would save each month over the course of your mortgage term, it won’t make sense.

There are few people in the world who can say with certainty that they will never move. Even if you wind up paying off your house and you like your neighborhood, there is always a possibility that you will choose or be forced to move. When a refinance is performed, the consideration of the lowered rate added to the fees should be less than what you are paying for now, multiplied by the term of your mortgage; for example, the cost to refinance is $2,000.00 and your payments are lowered by $100.00 for the term of your mortgage. You will only benefit financially if you stay in the home for twenty months. If you stay less than that, you are going to be losing money. If you stay longer than the twenty months, you will be coming out ahead and it would make sense to move forward with the refinance options. The fees can be lowered depending on the company you use but it is rare that the refinance process is free. Be wary of companies who make unrealistic promises when it comes to the mortgage on your house. Chances are, you shopped around for a house and completed thorough inspections before moving in, and so with this large of an investment you shouldn’t leave the mortgage to a cut-rate company. Choose a reputable company who can guide you through the process and help you decide if it makes financial sense at this time.  http://phillipslawcenterplc.com/resolutions/

Don’t feel pressured to refinance just because rates are at historic lows. The timing may be right for some, but not right for you. You may want to take some time and improve your credit score, or give yourself a bit more time to make sure you like the house and the area. If you decide you may be moving soon, none of the refinance options will make sense to you, unless you plan to rent it out. You may be able to rent out your home, and with the rates being so low, the price can be lower for a potential tenant, which can be a smart option in this market. Don’t rush into any decisions without discussing everything with an educated mortgage company or broker. Just because rates are low now doesn’t mean they won’t stay low for a while, and when you are ready, you can jump into a refinancing plan. http://phillipslawcenterplc.com/contacts/