Mortgage Rates Drop Down Below 5%

In the last three weeks mortgage rates showed trend down and dropped below 5 percent. Zillow Mortgage Marketplace reported refinance requests from homeowners saw increasing up to 39% for the first half of October compare the first half of September which only made up 41% of refinance requests. Of course, low rates will causing many homeowners to consider refinancing their mortgage.

But wait, before you’re intrigued in trying to refinance your mortgage, make sure to shop around to find the best loan and the best lender based on your financial that will give you advantage of these low rates. One thing that you must consider first, ask yourself and know the answer of common question i.e does refinancing make sense for you? You can use a Break-Even Point graph analysis to answer when it all make sense for you.

Today’s average 30-year fixed mortgage rate of 4.9 percent is now 60 basis points lower than it was in June, when the 30-year fixed rate was 5.5 percent, the highest level this year. That means that on a $200,000 loan (assuming a home value of $250,000) the monthly prinicipal and interest payment would now be $1,064.42 versus $1,141.61 for the same loan in June, saving a borrower $27,788.40 over the life of a 30-year loan.

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