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Is Now a Good Time to Refinance a Mortgage?
Is now a good time to refinance our mortgage to a 15 year fixed rate? We currently have a home equity line of credit with an adjustable 4.25% interest rate and balance of $90,000. The loan term has about 5 years remaining. It is very unlikely that we will be able to pay off the loan by end of term with one college senior & one college bound high school senior. We have a good to excellent credit history.
Now is an excellent time to consider refinancing for the following reasons:
1) Interest rates are extremely low from a historical perspective and I beleive they will be going higher over the next several years as inflation picks up.
2) While the availability of credit is still respectively tight, there are signs that it has loosened up over the past few months. Business Week ran an article in their last issue mentioning this fact but also stating that there is the possibility of it tightening again.
3) You mention that you probably will not be able to pay off the loan within the five years left which calls for refinancing your current obligation since it sounds like you plan on staying put long enough to recapture any fees associated with a refinance.
A great place to shop for current rates in your area is bankrate.com. Recent 15 year annual percentage rates (APR) for the Dallas area are below 4.6% after taking into account the refinancing fees. This is not much higher than your current rate and well worth the lock on your rate in a rising interest rate environment not to mention the fact that it will free up some cash flow to meet those growing college obligations
Ahorre November 1, 2009 08:14 PM