Wednesday, February 22, 2012

WSJ Wednesdays - Refinancing

This week's edition of WSJ Wednesday is inspired by an article found in the February 4 - 5, 2012 Weekend Investor section. Jessica Silver-Greenberg's article, "Refinancing: Time to Act?" discusses historically low interest rates and how some experts believe its a mistake for homeowners to wait too long to take advantage of them and refinance. Included with the article, is a table of "Average rates on a 30-year fixed-rate mortgage" from 2010 - 2012.

Rates were 3.87% for the week ending February 2, 2012. The current national average according to ERate for a 30-year fixed conforming mortgage is 4.018%. This seems to hold up what some economists say that with a slightly improving economy rates will tick upward.

Refinancing isn't right in every situation. Homeowners have to weigh factors like closing costs and the outstanding balance on their current mortgage. My husband spent months going back and forth with potential lenders looking for the right rate and terms before we refinanced last month. In the end, though we are now back to a 30-year loan, we are saving hundreds of dollars a month and lost no equity.

Have you considered refinancing? Have you opted to rent a single family home instead of buying one? What is it like in your area? Is the economy improving?


Kelly McClymer said...

We have refinanced several times, from our original 30 year mortgage, to get better rates and to get a little of the equity back for home repairs. My only stipulation to my husband has been to shorten the mortgage term (from 30 to 15, 15 to 10). That way, we'll actually pay off before we would have paid off the original mortgage. People blink when they learn how small our mortgage payment is -- helps to have a number-savvy husband.

Pricilla said...

We are lucky enough to not have a mortgage. But I will say that our first one back in 1982 was at 15%...needless to say we refinanced that one as soon as rates went down.