Refinance Mortgage Information

Most Americans have one thing in common. The largest financial transaction of their lives will be the purchase of the family home. When interest rates are stable, then refinancing the first mortgage on your home is not a popular topic, but in recent decades the variation in interest rates has become a subject of great interest.

To demonstrate the impact of the interest rate on a typical family, consider these monthly mortgage payments at varying interest rates on a 30 year fixed rate, original amount of $200,000 mortgage:
Interest Rate Monthly Payment
4% $ 790.24
5% $1073.64
6% $1199.10
7% $1330.60
8% $1467.53
9% $1609.25
10% $1755.14
Everything else is constant; that is an average of $133 per month for every one percentage point change in the mortgage rate, that is $1596 per year and $47880 per 30 years. Interest rates are very important.

It is just arithematic to assess the effect of refinancing as long as you have all the factors.

• lender source fee
• appraisal fee
• application fee
• lawyers fee
• recording fee
• points
• other closing costs

Then considerations on your part

• cash out at closing required to consolidate other debt
• cash out at closing required to finance renovations
• cash out at closing for special purchase
• current credit history
• current value of the home, evaluation or devaluation
• lifestyle: retiring, both working, one retiring, kids gone, new kids etc.

When you look at that list you might wonder how anyone refinances. The simple answer is to pay no fees. Find a broker who wants to do business not dictate terms.

Additional posts will discuss more about refinancing mortgage rates: what is important and what is not, what you can affect and what you cannot.