Refinancers Beware

From the desk of Omar Ezz, CFP®

When compared to today’s historically low 30 Yrs. mortgage rate of ~3%, it’s hard to believe at one point over the past 50 years rates were above 18%. Refinancing is undoubtedly top of mind for many Americans. However, homeowners should recall that lower monthly payments can be a function of both a lower interest rate AND spreading out your current balance over a longer period of time. This leads to minimal to no total interest savings over the course of the new loan. Luckily many mortgage companies have created products outside the standard 15 and 30 Yrs. terms that can match the remaining years of your current mortgage. Be sure to ask your mortgage professional what products they can provide to minimize both monthly payments and total interest paid.