With home mortgage interest rates at historic low rates it may be a perfect time to refinance your current Andover or North Andover home. Although refinancing can sometimes be a complicated process it may be worth the effort because it may save you tens of thousands of dollars over the life of your loan. 

Generally refinancing makes sense if you can reduce your current mortgage by 2 points or more.  Analyze whether the cost of refinancing makes sense by figuring out how long it will take you to cover the refinancing costs and whether you plan on being in your home that period of time.  If your new mortgage will save you $200 a month in mortgage payments and it will cost you $2,000 to obtain the loan then it will take 10 months for you to “break even” and begin to save money. 

Shorter loans have lower interest rates but higher monthly payments.  Mortgages are usually 15 years or 30 years in length.  Make sure that your new loan doesn’t have penalties associated with an early pay-off if your plan is to move or pay off your home loan early.

 Refinancing can be a wise financial decision and with mortgage rates at a 30 year low refinancing is at an all-time high.  Weigh all of the details and make sure that your new mortgage is exactly what you are looking for before signing on the dotted line.

This mortgage calculator can help you decide or Click here for more information about refinancing from Yahoo Real Estate.

Although mortgage rates are still above the record lows, mortgage interest rates have been falling. Rates rose this past June due to the yields on climbing long-term government debt. Investors became concerned that large amounts of extra government debt would trigger inflation. Experts speculate that mortgage rates fell this past week from market concern due to the weakening labor market. Whatever the reason, lower mortgage rates are great news for home buyers and home sellers in Andover, North Andover and the Merrimack Valley. Look at the difference just a 1% point increase makes in these loans.

People are waiting for prices to continue to drop; however, when rates go from 5% to 7%, it is the equivalent of a 20% increase in price to the borrower. Now is the time to buy.  For more information on how even small changes in fixed mortgage rates contact me at RE/MAX Partners in Andover, MA.  

Your credit score is critically important if you're buying a home.  A favorable credit score will not only make it possible for you to obtain a lower mortgage interest rate, but will be an important factor in determining whether or not the lender approving your loan. If you are concerned about your credit score, there is new information about what credit scoring companies deem important. One change that is being made is that there is a significantly more negative importance on a person that carries their credit balance near the limit. Experts are suggesting that people try to keep all balances owed near 30% of available credit. Another important fact is that you should never close an account with a zero balance. If you close the account, it can alter your total Debt to Credit ratio. It works in your favor to have a long credit history. Also, do not apply for too many credit cards, especially from companies that do not set a spending limit.  To raise your score, always pay your debts ON TIME. Your payment history makes up 35% of your score. A late payment can actually drop your score by up to 100 points and these late payments could last on your report for seven years. Bankruptcies last for ten years. If your score is below 620, people assume you are a bad risk dooming you to credit denial, sub prime interest rates, higher home insurance premiums, and possible checks form landlords withholding a lease. To order a free report go to annualcreditreport.com.

When refinancing your mortgage, you must look at the big picture to see if it really makes financial sense for you. Since rates are at an all time low, many people are considering it. Here are some ways to help you decide if it will benefit you or not. If you have plans to pay off your mortgage in the next few years it makes no sense for you, as you will not be able to recover the re-financing fees in time. Same thing goes if you are planning to move in the next few years. If you are planning to stay in your home for many years and currently have an Adjustable Rate Mortgage, then refinancing to a 30-Year Fixed is a very good option for you. Refinancing may not lower your monthly payments by all that much, but you may sleep better knowing that those payments will never go up. Another good reason to refinance is if you are currently paying a very high rate. A very good rule of thumb is to calculate your costs and make sure that you can earn back the roughly $2,000 in fees that you will pay, within two to three years. Two other things to consider are that if you are paying less interest over time, you will pay more taxes. Also, money that you pay in refinancing fees could be invested instead. Think of the return on that sum you could earn over thirty years! Your lender will need to have your home appraised in order to qualify your new loan and to be sure the new loan reflects the current value of your home here in Andover or North Andover.  Most lenders charge an appraisal fee for this service.  I can help you "prequalify" the current value of your home by providing you with a FREE market analysis of your home....or sign up for a free Market Snapshot to see what homes have sold for in YOUR neighborhood. If you have specific questions about your mortgage or need a recommendation for a trusted lender here in Andover or North Andover...please contact me at REMAX Partners, Andover, MA.  Home values in Andover and North Andover I'm happy to help!