The Benefits of a Mortgage Refinance for Older Adults
By: Rosemary Rugnetta | November 30th, 2012
While record low mortgage rates are quite the bargain for every homeowner and potential home buyer, there are some that should seriously consider refinancing at this time. In particular, boomers who are heading towards retirement and seniors who are already retired, can both benefit from the low mortgage rates currently available. The savings associated with a mortgage refinance for older adults should be considered as part of their financial planning.
Mortgage rates have been at or near record lows for most of this year 2012. Freddie Mac, a government sponsored entity that has been keeping mortgage rate records since 1971, has reported that the current rates are indeed historical and hitting record lows never reached before. Anyone homeowner who is able to take advantage of this opportunity, should do so without hesitation. As a financial decision, homeowners who are refinancing must decide whether it is in their interest to aim for a lower monthly mortgage payment or a shorter term loan.
It is a great time for boomers, who are getting closer to retirement, to refinance. If choosing the lower monthly mortgage payment that comes with a 30 year mortgage, the extra money saved from the refinance can be put away for retirement. Although this is a good move, these borrowers need to know that resetting the mortgage with a long term loan builds equity at a slower pace. On the other hand, boomers can choose a shorter term loan which can be paid off by the time they retire, thereby freeing them of mortgage payments when they are relying on social security and retirement funds for daily living.
Seniors who are already retired may find that refinancing at this time can help ease their debt burden. According to AARP, 44% of those homeowners 65 to 74 years old are still making mortgage payments, some as a result of refinancing during the height of the housing boom in order to tap equity in their home. Choosing a longer term loan that results in a reduction in monthly mortgage payments may be what some seniors need to live comfortably through retirement. Some have reached a point when they own their homes free and clear. Refinancing a portion of the value of their home may provide the necessary funds for other expenses, such as necessary home repairs and maintenance.
While boomers and seniors can benefit from the current low mortgage rates, some may have a difficult time receiving approval due to lack of equity or lack of income. There are several mortgage refinance programs available, such as HARP 2.0 and the FHA streamline refinance, all of which are offering low mortgage rates. Here at FreeRateUpdate.com, the online form can be submitted with very little personal information and no social security number. This process is convenient and will send back a response almost instantly. It is the easiest way to find out more information about what type of mortgage you are eligible for, any special programs being offered and the low mortgage rates available.
FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at about a 1 point origination fee.
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