If you pay attention to the financial markets you probably heard that interest rates reached a 50 year low this week. I will leave it to the economists to discuss whether this is good for the economy or not, but for the average individual, this is a great news.
Lets say you owe $300,000 on your house. If you are paying this on a 30 year loan at a 6.5% rate, then your monthly payment will be 1896.20. Of course, when you factor in taxes and insurance, your payment will actually be significantly higher than this, but you don't have much control over those costs.
You do have control over your interest rate. Right now, if you refinance the same amount and qualify for a 4.1% rate, your payment will be 1449.60. So if you have a 6.5% rate you will pay 1896.20 per month, and if you refinance right now, you will pay 1449.60 per month. Thats $446.5 in monthly savings. It will take about a 30 min phone call, and some paperwork, but this rate will be fixed for the life of the loan, meaning you save $446.5 every single month for 360 months. Thats $160,776. Its definitely worth a phone call and some paperwork. Howtomakeadollar is in the process of refinancing its house today, and I recommend you do the same.
If you decide to refinance you should shop around for the lowest rate that you qualify for. All lenders that I have dealt with require the same four things, so you may as well have everything ready.
you will need:
1. A copy of your last monthly mortgage statement
2. W2 forms from 2009 and 2008
3. Proof that the house is insured
4. Two recent pay stubs
I could talk for hours about the logistics of this and how to calculate your costs, but Its getting late.
Here is a helpful mortgage calculator that lets you experiment with interest rates