Over the past 30 years, Portland mortgage rates have ebbed and flowed significantly in a financial tide of home mortgage offerings. Near the beginning of the 1980s, for example, mortgage rates for regular thirty year, fixed rate mortgages were right around 18%. Today, though, we see rates for the same type of mortgage loan roughly 5% – and even sometimes, in the 4 percent range.
Numerous Portland home owners who got their mortgage when interest rates were way higher are now looking at a Portland refinance in order to reap the benefit of the lower rates of today. If you are one of these people, know that there are some expenses that will be involved in refinancing your home, such as a home appraisal, getting title insurance, and a loan origination fee, just to name some. To figure if these expenses will off-set with the potential cash you can save by refinancing your mortgage, you can use the general rule of thumb referred to as the 2 percent rule.
In plain English, this rule suggests that the percentage difference between your current rate on your loan and the new interest rate being suggested should be at least 2 points. If you were among those borrowers in the 1980’s who boughtan interest rate in the teens (and today you can get a rate around 5%), it would make very good sense to refinance.
What you will find below are three benefits why people are refinancing in Portland with a lower rate:
1) Lowering monthly payments – By lowering the interest rate of your loan, you can see a dramatic difference in your monthly mortgage payment. And, every little bit helps. Some people who refinance have saved thousands of dollars over the course of their loan period. How much you will personally save, though, totally depends on your specific numbers. So, make sure to talk to a mortgage specialist who is able to do the number crunching for you to see how much you can potentially save by refinancing.
2) Changing the type of loan you have – Some people make the decision to refinance in Portland even though they won’t save much money by doing so. Consider of the large number of people who got an ARM (Adjustable Rate Mortgage). seeing tons of these people refinancing simply to switch to the fixed rate mortgage. Also, some people who have a balloon worked into their mortgage are choosing to refinance when it gets nearer to the date to make that balloon payment.
3) Pulling cash from your equity – If you’ve lived in your house for 10 years or more, there’s a good chance you have a sizeable bit of equity because of the overall Portland home appreciation (even with the existing dip in house values) and to the fact that you’ve made those monthly mortgage payments for some time. This is why some folks choose to withdraw cash out when they refinance their mortgage loan in order to help with retirement or with college expenses for the children.
If you are thinking about refinancing your Portland house, be sure to talk with a seasoned loan officer – someone experienced in refinancing who can talk to you and go over your situation and your numbers as well as the the various options you have. And know, that each situation is unique. Your mortgage professional should inquire about short term and long term benefits (or consequences) that are specific to you and adjusted towards your financial future.