Record-low Mortgage Rates Create Unique Refinancing Opportunities

Record-low mortgage rates aren’t jump-starting the U.S. housing market. Opportunities are given with these low mortgage rates and the real estate market being so slow. Since prices of homes are as low as mortgage rates are, short term losses are taken by many for the gains that come with a lower rate of interest. The majority are losing their homes, but coming out ahead with what they get instead. Numerous feel entirely comfortable spending money to refinance the mortgages they have.

Record-low mortgage rates and the U.S. housing market

With the U.S. housing market in the toilet, the Wall Street Journal reports that economists say trading up to new homes or refinancing existing ones can make good financial sense — even if it means giving up cash to get out of an underwater mortgage. Better homes are accessible to anyone who’s willing to make the sacrifice with their mortgage. Every person can afford larger homes with all the mortgage rates so low.

Cash-in refinancing versus cash-out refinancing

Most individuals want extra money around which is why they prefer “cash out” financing. Oddly enough, more people are interested in “cash-in” refinancing, according to the Los Angeles Times. It makes sense that individuals would put more money into their home considering that’s one of the most stable investments now and days. In last year’s fourth quarter, a 3rd of all borrowers who refinanced mortgages lowered their principal balances by putting money into the deal rather than taking it out.

Investing wisely

Many want their mortgages to be gone. You’ll have all that money you saved on interest for spending now, reports totalmortgage.com. One who pays off their mortgage as soon as possible is then more likely to have some extra money laying around to spend on other things or other investments. It is nice to see people being willing to invest in real estate like that now. Other borrowers are taking advantage of record-low mortgage rates to refinance from 30-year fixed mortgages into shorter-term mortgages (15 or 20 year fixed). This sets them up to conserve thousands of dollars over the life of their loans, and their monthly payments are lower than they were before.

Find more details on this subject

Wall Street Journal

online.wsj.com/article/SB10001424052748704421304575383490870014662.html?mod=WSJ_hpp_sections_personalfinance

Los Angeles Times

articles.latimes.com/2010/jul/11/business/la-fi-lew-20100711

Totalmortgage.com

totalmortgage.com/blog/mortgage-rates/low-mortgage-rates-afford-unique-housing-opportunities/5198