Many Homeowners Should Refinance


June 19, 2005 LOS ANGELES -- Until two weeks ago, many of us may have been under the impression that the refi-boom era has come-and-gone. Furthermore, many who locked interest rates after the so-called boom ended may have thought they could possibly never be able to lock an interest rate at the historic low levels seen between 2002 and mid-2004. The good news is that these homeowners are in luck, as rates have plummeted back to 40-year low points recently.

It's true that the all-time low seen for home financing rates was back in June of 2003, when the 30-year rate averaged 5.21 percent, but presently interest rates are knocking on the door of that historical marker. Henceforth, smart home mortgage holders should weigh the benefits of refinancing now and not miss the proverbial boat.

The fact is that rates will likely climb above levels we are seeing presently during the course of the next 6 months, so it doesn't take an accounting expert to see now is a great time to refinance. In fact, even if your current rate isn't much higher than 5.500 percent, the advantages could be in abundance when you do the math, especially if you desire a cash-out refi. There is strong likelihood that a large number of homeowners who purchased their property just one year ago will be inclined to refinance at today's current rates.

One year ago, 30-year fixed interest rates went as lofty as the 6.46 percent mark. Currently, home loan rates are averaging less than 5.75 percent, even after the discount points are added. An example of possible benefit would be that a typical monthly payment on mortgaged amount totaling $200,000 which previously carried a 6.5 percent rate would be $1,264. If refinanced now at 5.75 percent the payment would be reduced by a significant amount making the final number around $1,167. - Article by Benjamin Pengreen for CMR Financial Original Mortgage News.

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