We now have the lowest 30 year fixed mortgage rates since data has been collected (37 years) in the USA. Is this due to the Fed cutting the discount rate? I do not think so. As I have said previously 30 year fixed rates are not correlated with federal reserve rates. But this time the government is actively seeking to reduce mortgage rates.
The 15-year fixed-rate mortgage averaged 4.92%, down from last week when it averaged 5.20%. A year ago the 15-year loan averaged 5.79%. The 15-year mortgage hasn’t been lower since April 1, 2004, when it averaged 4.84%.
These rates sure are fantastic if you are in the market. I was not in the market, but I am considering re-financing now. You need to be careful and not just withdraw money because you can. If you can refinance and reduce your payments it may well be a wise move though. One problem can be extending the date you will finally be free of mortgage debt. If you re-finance a current 30 year loan, that you got 5 years ago, you will now be paying 5 more years. One option is to see if you can get a 25 or 20 year loan. Or if you can make a 15 year loan work, do that (15 and 30 year fixed rate mortgages are common).
A mortgage is a huge financial decision, you need to do your research before making a decision. You should checking several places for quotes. Re-financing with your current mortgage holder can sometimes make the process easier, as some of the paperwork can be avoided and sometimes some fees too. And if you don’t understand what is involved then take the time to learn. We have too much recent experience of people not understanding the mortgages they signed. Don’t add to that total. Don’t forget to determine all the costs involved before you refinance.
It takes some effort with all the fees there are to make sure it really makes sense. Here is a look at some mortgage terms that can help in that process. Another important factor to consider is how likely you are to stay in your current house. The longer you stay, longer you have to recoup the costs (in money and bother) from refinancing.