Virginia Beach Real Estate

Interest rates in Virginia Beach reached their lowest point since 2004, this past week. Even though they inched up a bit AFTER the Fed cut the short term rates for the second time in two weeks, rates on a 30-year fixed-rate loan averaged 5.68% for the week.  

With interest rates this low, the question arises...Is it a good time to refinance my Virginia Beach home? This depends. You need to determine your break-even point. So, what is a break-even point? this is the amount of time it will take to save in monthly payments what you paid in refinance fees.

BankRate.com has an example I am going to use, as I can't explain it better:

"Let's say you would save $100 a month by refinancing, and the closing costs would be $3,000. Your break-even point is 30 months from now: the $3,000 in fees divided by the $100 a month in savings.

In this case, if you expect to continue living in the house for more than two-and-a-half years, you'll save money in the long run by refinancing. If you plan to sell the house before then, it's probably best to stick with the mortgage you have.

How do you figure your monthly savings? You'll have to get an estimate of the rate for which you'll qualify. A mortgage broker or loan officer can tell you that. Ask the loan officer, or consult a mortgage calculator, to determine what your principal and interest would be with the new loan. Look at your payment coupon to find out what your current monthly principal and interest are. Now you can figure out how much you would save every month."

One thing to look for when considering a refinance is whether or not there is a prepayment penalty on both your current mortgage and the one you are considering changing to. You don't want to be surprised with these unexpected fees.

Still don't know if refinancing is right for you? Contact us at 866-222-0158 #550 or info@butlerteamhomes.com, and we will gladly refer you to a reputable lender who will provide you with the information you need to make a good decision.

If buying a new Virginia Beach home is something you are considering, visit our website to search all Virginia Beach homes for sale.

Related Posts

No comment yet...

Comment on this article

Name:

Email:

Your email address will not be displayed.

Site/Url:

Your URL will be displayed.

Comment text:

Standard HTML is allowed in posts

Options:

Line breaks become <br />


Remember me


Allow users to contact you through a message form.

Captcha:

Please enter the characters from the image above. (case insensitive)

Captcha code:

This post has no feedback awaiting moderation...