Falling Mortgage Rates...Again!
Welcome to Saving Money with Andrew!
Just when it seems mortgage rates can’t hit new lows (as discussed in these posts from September 2019 and July 2020), they fall back again. 15 and 30 year rates have both dropped significantly after briefly rebounding, with 15 year rates hitting all-time lows in the past month:
While I can’t say whether now is a great time to buy a home, there are few times better to consider refinancing an existing mortgage, whether into a new 30 year fixed or (if you are paying your mortgage quicker anyway, or just want a much lower rate) a 15 year fixed. Some key considerations I’ve covered in prior posts, with some new notes:
How long do you plan to stay in your home? The longer you plan to stay, the more likely it is to be worth it. But make sure to run the numbers - if the interest savings is substantial, it might still be worthwhile even if you only plan to stay in your home a fairly short while (a few years).
How much liquidity do you have? If you have substantial savings, it may be worth refinancing into a much lower rate 15-year mortgage, which at the moment has average rates nearly 0.7% lower than the average 30-year. Your monthly payment will likely be higher, but your interest cost will be significantly lower, allowing you to build more equity.
Make sure to shop around! It makes sense to talk to your current lender first, but make sure to compare their refinancing rates to other lenders in the area as the rates vary widely. I have used Bankrate’s comparison tool in the past, and recently came across Costco’s mortgage service, which caps fees at very low levels. In many cases, it’s worth joining Costco for the mortgage savings alone.[1]
Housing is typically the #1 expense for most people, and reducing your interest rate could potentially save you hundreds of dollars per month. Good luck!
And now…Andrew’s pick(s) of the week:
The world lost Anthony Bourdain far too soon. His April 9, 2000 New Yorker piece, re-ran in last week’s issue, is an incredible day in the life of a chef. And my wife enjoyed this new documentary about his life.
The terrific Cory Wong recently collaborated with the Swedish fusion band Dirty Loops for a few great tracks. The most accessible and fun was this terrific cover of Thriller:
I hope this has been helpful. If you liked it, please share it on social media! Also, please send me your feedback, requests, and success stories.
[1] Note - this post is *not* sponsored by Bankrate or Costco. As always, I will never charge for this newsletter or run advertisements.