LANSING, Mich. (WLNS) – This week, local money expert Stephen Schiestel explains the process behind refinancing a mortgage and what you should consider when taking that option.
“The first rule of thumb is generally ‘where’s my mortgage rate today?’ And if I can, if I can reduce that by at least a percent, it used to be 2%, but with rates so low, if I can get it down at least 1%, then it’s something I should consider,” said Schiestel.
“I should reach out to my banker in the branch or a mortgage person to just see, okay, where rates today and what are the costs?” said Schiestel. “The key thing to really take into consideration though is how long am I going to live in my house? And, and am I going to be able to live there long enough to take advantage of the lower [costs.]”
The main goal of refinancing a mortgage is to reduce payments.
“Yeah, it is core is at if I’m today paying 5% on a 30 year fixed mortgage today, I could refinance it and I’m looking at, I could get a 3.2%.”
“I think we have to be aware of, I mean, there are appraisal costs, there’s title insurance, fees to the mortgage person. Those all had to be taken into consideration to make sure that it doesn’t make sense or not,” said Schiestel.
“Where rates are right now, it looks like through some of the recent federal reserve announcements rates might start to creep back up. So if it is something that you are possibly considering now, maybe a good opportunity to just take another look at it. Maybe before we start seeing that curve heading in the opposite direction.”