So here is the situation. More Americans are foreclosing on their homes than at any other time in history. Property values have fallen due to the large surplus of empty houses on the market. Mortgage interest rates are at their lowest point in years. What does that mean you might ask? If you are a homeowner who has found themselves with a house that is valued at less than the principal on your mortgage or if you currently have a fixed rate loan that is several points higher than the current rate then you might want to consider refinancing your current mortgage.
Though banks are somewhat reluctant to lend money to new home buyers these days, they seem to be willing to lend to people wishing to refinance as long as they have a solid credit history. Banks are in desperate trouble and are looking to make loans to those they trust to repay them. What this leads to is a very competitive loan market where those looking to refinance can see great gains.
By refinancing a high interest rate loan, you can save thousands of dollars over the remaining life of the loan. Perhaps even better, you can greatly reduce your monthly payments, something that cash strapped people could really benefit from. Even a reduction of 1 point can save you a considerable amount of money.
If you are planning to remain in your current home for many more years, refinancing will also allow you to cash out some equity to use for other things. Also, fees associated with refinancing can be steep and it will take a couple of years to see any benefit from refinancing. But over the long term those fees will be worth it.
Of course refinancing is not for everyone. It is a tedious process and if saving a few thousand dollars over the next ten years doesn't seem worth the effort then you certainly don't need to do it. But if you are struggling with your current mortgage or if you are saddle with an interest rate from the boom years, you should definitely consider your refinancing options. Just a few minutes on the internet can give you a good idea of the deals available and how much money you are likely to save.