Baltimore Refinance Guide

In the past 30 years, Baltimore mortgage rates have gone up and down wildly in a financial tide of mortgage offerings. Near the beginning of the 1980s, for example, interest rates for regular 30 yr, fixed rate mortgages were in the neighborhood 18 per-cent. Right now, though, we are seeing interest rates for exactly the same type of mortgage loan in the area of 5% – and on occasion, in the 4 percent range.

Many Baltimore home owners who purchased when interest rates were much higher are now thinking about a Baltimore refinance in order to reap the benefit of today’s lower rates. If you’re among these people, know that there are some expenses that will be involved in refinancing your home, such as a home appraisal, getting title insurance, and a mortgage origination fee, just to name a few. To figure whether these expenses will off-set with the potential cash you might save by refinancing your loan, you can use the general rule of thumb referred to as the 2 percent rule.

In plain English, this rule recommends that the percentage difference between your current rate on your mortgage and the new rate being offered should be at at a minimum two points. If you were among those those who borrowed in the ’80’s who receivedan interest rate in the double-digits (and you can get a rate now for around 5 percent), it would make a lot of sense to refinance.

Listed below are 3 good reasons why people are refinancing in Baltimore with a lower rate:

1) Lower your monthly payments – By reducing the rate of your mortgage, you will see a major difference in your mortgage payment every month. And, every small piece adds up. Some borrowers who refinance have saved thousands and thousands of dollars over the durationof their loan period. How much you will save, though, entirely depends on your specific situation. So, be certain to speak to a mortgage professional who can do the number crunching for you to determine how much you might be able to save by refinancing.

2) Changing the kind of loan you have – Some borrowers choose to refinance in Baltimore even if they won’t save much money by doing so. Consider of the many folks who got an ARM. seeing many of these folks refinancing simply to change to the fixed rate mortgage. In addition, some folks who have a balloon payment included in their mortgage are choosing to refinance when it gets closer to the date to make that big payment.

3) Extracting cash from your equity – If you’ve lived in your home for 10 years or more, you probably have a decent bit of equity due to the overall Baltimore home appreciation (even with the current dip in home values) and to the fact that you’ve been making those payments every month for quite a while. Because of this, some people select to withdraw money out when they refinance their mortgage loan in order to aide with retirement or with college expenses for the kids.

If you’re considering refinancing your Baltimore house, make certain to talk to a professional mortgage specialist – someone experienced in refinancing who can sit down with you and review your numbers and the the various options available to you. And know, that each situation is different. Your home mortgage specialist should inquire about your short term and long term benefits (or consequences) that may be unique to you and targeted towards your financial future.