Should you refinance your mortgage? - Chicago News and Weather | FOX 32 News

Should you refinance your mortgage?

Posted: Updated:
ATLANTA -

With mortgage rates at historic lows, it has many people thinking about refinancing. Cutting your mortgage payment down sounds like a good idea, but, refinancing is not for everybody.  

A 30-year fixed rate right now is about 3.5 percent.  A 15-year fixed rate is 2.75 percent. Do you get in there and take advantage of that so that you can lower your mortgage payment? Perhaps, but to qualify you'll still need a steady income, good home value and great credit.

According to Bankrate.com, you can't qualify for the low rates unless your credit score is high -- in the 700 range.  This is the perfect example of why you have to work to get your score up. If you have a conventional loan, in order to refinance, your home needs to have about 20 percent equity. You cannot owe more than the home is worth.

Refinancing saves you money on your monthly payment, but be aware that you have to pay closing costs.  It's no deal if you don't stay in the house long enough to recover those costs, so do some math and figure out how many months of lower payments it will take to make up your closing costs.

If you owe more than what your home is worth, you do have some options if your loan is owned by Fannie Mae or Freddie Mac. There is a program called HARP -- the Home Affordable Refinance Program.  You still have to have decent credit and a steady job history, but they'll work with you. Go here for more details -- www.knowyouroptions.com

  • I-Team Story ArchiveMore>>

  • Fox 5 I-Team

    Cheap vs. Frugal

    Cheap vs. Frugal

    Wednesday, April 23 2014 9:15 AM EDT2014-04-23 13:15:25 GMT
    There is nothing wrong with saving a buck, but can you cross the line? There is a difference between being cheap and being frugal.
    There is nothing wrong with saving a buck, but can you cross the line? There is a difference between being cheap and being frugal.
  • Fox 5 I-Team

    Save on Vacation

    Save on Vacation

    Monday, April 21 2014 9:56 AM EDT2014-04-21 13:56:05 GMT
    Thinking about vacation is a lot of fun. Thinking about what it'll cost you is not so fun. Here are some ideas for cutting costs.
    Thinking about vacation is a lot of fun. Thinking about what it'll cost you is not so fun. Here are some ideas for cutting costs.
  • Get Financially Fit: A Step-By-Step Plan

    Get Financially Fit: A Step-By-Step Plan

    Monday, April 14 2014 9:15 AM EDT2014-04-14 13:15:13 GMT
    April is Financial Literacy Month, so it's time to think about getting financially fit.  Let's start with two questions. Do you know how much you spend each month?  How much of your check should you save?
    April is Financial Literacy Month, so it's time to think about getting financially fit.  Let's start with two questions:  Do you know how much you spend each month?  How much of your check should you save?
  • Contact the FOX 5 I-Team

    * denotes required fields

    We're sorry, but only one entry is allowed per person.
    Thank you for your continued interest.

    Thanks for contacting FOX 5.  To reach our newsroom by phone, please call (404) 898-0100.

Powered by WorldNow

205 N. Michigan Avenue
Ground Floor
Chicago, IL 60601
Station Operator: (312) 565-5532
Newsroom: (312)565-5533

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices