Opportunity is Knocking and None to Gently
We could share a bunch of equations concocted by people with bow ties and lots of letters after their names, but here’s the scoop in plain English: Weak economic times often result in low interest rates. And the lower the interest rate the lower your monthly payment. All of which makes today a great time to think about refinancing your home. Current interest rates are the lowest interest rates in memory which means that you can now afford to redecorate your adorable cottage. No more waiting until “you have the money.” According to bankrate.com, The average interest rate on an outstanding mortgage at the beginning of 2012 was 5.098 percent, according to the Bureau of Economic Analysis. However, lenders today are offering rates well below that benchmark, making a refinance options a no-brainer for many.
Our Friend, the Deduction
Not only will you be paying low interest, but the interest you pay is tax deductible. Mortgage interest and property taxes are deductible from federal and state taxes, as are point paid to secure a loan to refinance a home. In fact, if the reason your refinancing a home is job-related, you may even be able to deduct some moving expenses from your taxes. Ask your accountant to be sure.
Why You Don’t Have to Be Married to Refinance
While 30-year, fixed-rate mortgages are the traditional way to go, they’re certainly not the only way to go. Many people are now choosing 15- or even 10-year mortgages. And if you’d prefer to keep your options open, there are adjustable rate mortgages — which not only offer a significantly lower initial interest rate, but also have more flexible underwriting criteria. And that can be especially helpful for just about any homeowner. What’s more, according to realestateabc.com, “As a fairly general rule, homes appreciate about four or five percent a year. Some years will be more, some less. The figure will vary from neighborhood to neighborhood, and region to region.”
Don’t Forget the Intangibles
Although the economy goes up, down and sideways, some things never seem to change. Like the emotional satisfaction that comes from owning a home. Life under the mortgage is much freer tan life under the lease. It is, after all, your home to populate with pets, plants, children even in-laws. You’re not subject to the terms of a lease or the whims of a landlord. And you’ll enjoy the considerable peace of mind that comes from not having to worry about fluctuations in finances expenses from year to year.
Is it Wrong to Take Advantage of a Down-turn?
Despite the stagnant economy, most people would agree that banks and other lenders are still doing quite well. And frankly, you’d be helping them out by refinancing and either staying with your existing lender (some money is better than no money) or seeking out someone new who is willing to earn less than your previous lender. No matter how you look at it, keeping your home and paying your mortgage is always preferable to not paying it.
Author Karen Boyarsky is an avid blogger. You can follow her on Twitter @Boyarsky_kareni.