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REAL ESTATE CORNER by Robin Shapiro
Robin Shapiro: 718-490-9463
With 30 year fixed rate mortgages approaching an all-time low, some people may
be wondering if it makes sense to refinance their old mortgage. The rule of thumb is
that it makes economic sense when you can reduce your rate by 2%. There are
usually some costs associated with refinancing. Therefore, you’d need a lower
interest rate in order to save enough money to overcome the costs and actually save some money.
Everyone’s situation is different. Consequently, if you want to explore refinancing your mortgage
then a good mortgage broker may be able to help you. I like Ken Weiss at Diversified Funding, tel.
#718-748-5737. It may also be a good idea to consult with your accountant before you proceed.
Here’s an example of the savings on a refi: If an existing mortgage is 5.35% then this costs
$558/$100K/month. Mortgage rates are currently at 3.45% approximately (for people with excellent
credit). This costs $446/$100K/month. Therefore, the person with a 5.35% mortgage can save
$112/month for each $100K of existing borrowed money.
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Call me. Love, Robin
Some people may want to refi for a savings of less than 2% in order to consolidate debt or shorten
the term of the mortgage.