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With interest rates hovering around 4%, a figure far beneath average rates, it is no wonder why so many homeowners are taking advantage of the low interest rates and refinancing to save money every month. Another reason why this is an excellent time to refinance your home loan to a lower and more affordable rate, is because of what has been called an “Operational Twist.” Since there isn’t a secondary market, operational twist was put into affect by the Federal Government to keep interest rates low. According to Freddie Mac, rates are expected to stay low for several months but will increase with the expiration of the Federal Reserve’s “Operation Twist” by mid-2012. It’s actually right around the corner, so the best time to refinance is in the next few months. Please continue reading below…
The average interest rate on a 30 year loan over the past 50 years has been about 9%. If you purchased a home during the height of the housing bubble (2003-2008) you likely have a interest rate in the range of 6-7%. Today, the average rate for the same 30 year loan is 4%!!! To help clarify, let’s look at an example. Say you have $250,000 of principal left to pay on your home that you paid $450,000 for. A 30 year 7% rate would put your monthly payment at around $2,395.10. A 30 year loan at today’s 4% rate, yields a monthly payment of $1,193.54. That’s about a $1200 savings per month! If you wanted to pay off the principal sooner, a 15 year loan at a 3.3% rate would result in a monthly payment of $1,762.75.
The perception of most people is that interest rates will continue to go down, but we’ve actually never seen rates as low as they are now in history. They are actually 50% lower then they have been historically. The reality is that its still very plausible to refinance and the right time is now.
With all the economic uncertainty that exists today, there are many benefits to refinancing at these new rates. For one, it’s a chance to stabilize your financial future. Refinancing can result in saving literally hundreds of dollars a month on interest and at the same time helping you gain equity on your home even faster.
Russ Schreier is a highly regarded mortgage lending professional with over twenty-two years of experience in the residential lending industry, including thirteen years in executive management, overseeing business development through establishment of joint ventures with real estate companies and home developers, recruitment and retention of loan originators, and oversight of daily operations including origination and fulfillment divisions. Russ is a featured industry expert on NBC Nightly News, CNN, Mortgage Banking Magazine and Robb Report.
Samuel Scott Financial Group is a boutique mortgage company recognized for superior customer satisfaction and the way they tailor the residential loan process to every individual client. Todd “Samuel” Pianin and Brian “Scott” Reynolds founded the company on the principles of long lasting relationships, and a sincere honest approach to every single individual we serve. Consistent and reliable, Samuel Scott Financial Group has been selected as The Best Mortgage Company in San Diego for the 5th straight year by readers of local publications.
President: Todd Pianin
Vice President of Sales: Russ Schreier
Mortgage Advisors: Christian Alvarez, Dean Brown, Mark Buchanan, Mitch Palmer, Brian Reynolds, Debra Roberts, Mark Robertson, Alex Scoma, Brian Shaw, Keith Sims, David Talbott.
Samuel Scott Financial Group is licensed by the CA Dept. of Real Estate license #01458652 and NMLS identifier 235584. ©2011 Samuel Scott Financial Group. All rights reserved.