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Is Now A Good Time To Refinance Your Mortgage?

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Nov 26, 2008 5:51 pm US/Central

Is Now A Good Time To Refinance Your Mortgage?

 Timeline: U.S. Credit Crunch & Financial Failures

 View Market Summaries & Leading Stock Changes
DALLAS (CBS 11 / TXA 21) ― There has been a run on refinancing requests in the wake of Tuesday's sudden drop in interest rates. Loan officers say they have received a lot of requests from homeowners, looking to refinance.

But before homeowners sign the papers, they will want to make sure they can really benefit from the lower rates.

Refinancing may seem like an easy way to save money, but it's not the best fit for every homeowner.

"I constantly get letters in the mail to refinance, but I just want to stay at my 6 percent," said homeowner Michael Grandison.

Loan officers say some homeowners are better candidates than others.

"It's really important that the person go to a trusted mortgage advisor who's going to let them know," said Linda Davidson, Service First Mortgage.

Davidson said refinancing may not be a good option if:

- Your mortgage is $75,000 or less.
- You don't plan to stay in your home very long.
- Or if you have a high pre-payment penalty.

But, homeowners might want to consider re-financing if:
- Your mortgage is $100,000 or more.
- Your rate will be reduced by half a percent or more.
- If you plan to stay in your home at least three years.

But, there's no telling how long these rates will stick around, so it's better to lock in sooner than later.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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