The new year is getting underway with a glimmer of hope for those tracking mortgage rates. HSH Associates reports that average combined mortgage rates (for both conforming and jumbo mortgage loans) fell during the week of Jan. 3. Mortgage rates for a 30-year fixed-rate mortgage (FRM) dropped by 7 basis points to 5.12 percent, while corresponding rates for a 15 year FRM fell by 5 basis points to 4.51 percent. Rates for a 5/1 adjustable-rate mortgage fell by 6 basis points to 3.89 percent.
New Year, new mortgage loan
Refinancing your mortgage loan can be a valuable financial tool under the right circumstances. Here are some of the benefits of refinancing:
- Debt consolidation. Lower mortgage rates may accommodate borrowing enough additional cash for consolidating high APR credit card debt. When considering this option, keep in mind that refinancing requires paying closing costs, and that mortgage loans are usually paid off over a longer time than credit card debt. These factors can reduce actual savings.
- Home improvements. Refinancing for cash out provides funds for making home improvements. Review your plans with local real estate pros, as over-improving your home or making improvements not desired by buyers may not add value to your home.
- Reducing your mortgage repayment term. Refinancing from a 30-year mortgage to a 15-year mortgage can potentially save thousands of dollars in interest that you would pay over the longer term. Although monthly payments are higher, the shorter repayment term is a great choice for homeowners wanting to pay off their mortgage loans faster.
Shopping mortgage quotes online and discussing your needs with your financial adviser can help with finding your best refinancing solution. Our live database of current mortgage rates can help you find the best mortgage rates in your area.
