Thinking of refinancing? It’s time to act

Have you considered refinancing the mortgage on your Chicago condo or single-family home? Now might be the right time.

According to a recent story by the National Association of REALTORS®, mortgage interest rates are now near three-year lows. The association said that as many as 20 million homeowners could see their own interest rates drop by 75 points by refinancing.

The association, citing numbers from Black Knight, said that owners with a FICO credit score of 720 or more and with 20 percent equity in their homes could save about $270 every month if they refinanced to a mortgage with a lower interest rate. That comes out to a savings of about $3,240 a year.

It seems that owners are getting this message. According to the Mortgage Bankers Association, a growing number of owners are refinancing. The association said that refinances are at their highest point since the middle of 2016 and have doubled since late July. The bankers said that the number of refinances is up 37 percent during the past week alone.

What is causing this? Low interest rates. Freddie Mac reported that the average interest rate on a 30-year, fixed-rate mortgage averaged 3.6 percent last week.

Refinancing isn’t free, of course. You can expect to pay from $2,000 to $3,000 for a refinance. The key, then, is to make sure you save enough each month thanks to low interest rates to pay back the cost of a refinance quickly.

Your best bet is to meet with a mortgage lender. This lender will look at your credit score and study your finances to determine if refinancing makes sense for you. And if it does? You might soon be saving hundreds of dollars every month.