This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How You Can Save By Refinancing Now

NEW YORK (TheStreet) -- You will probably never see such a golden opportunity to refinance your mortgage loan in your lifetime.

With mortgage loan rates at such a low point, refinancing now can save you hundreds of thousands of dollars in interest. And by refinancing for a shorter term, you might be able to become debt-free at a younger age than you previously expected, thus setting yourself up for a more secure retirement.

Of course, as you face the daily onslaught of sales pitches, media reports and financial advice, you're unlikely to hear too many voices pointing the way to escaping the debt trap completely, but the numbers speak for themselves.

Mortgage rates change daily, and everybody's financial picture is different. But chances are if you're at mid-career and own a home, you have a mortgage loan. There's also a good chance that your loan has a 30-year fixed-rate, because when you bought your home, your greatest concern was monthly cash flow.

And with home values in many areas declining so much over the past several years, you haven't considered refinancing.

Right now, the mortgage rates are so low that you might be able to refinance with a 15-year fixed-rate loan, thus escaping the debt trap faster than you might have originally planned, while also cutting your monthly loan payment. The icing on the cake is the outrageous amount of interest you will avoid paying.

This discussion does not cover "cash-out refinancing," which increases your debt and, as we have seen in this real estate crisis, could lead to disaster.

The radical notion presented here is to clean up your personal balance sheet while taking advantage of historically low rates.

Checking available rates on Tuesday, Bank of America (BAC) was offering a "conventional" 15-year mortgage refinancing for $200,000 at a rate of 3.625%. Of course, this rate doesn't factor in any concerns the bank may have if you have had recent credit problems, and the bank charges 1.125 "points" at closing, or a fee of $2,250 to lock in that rate on a $200,000 refinancing. Factoring-in the points and loan amortization, the Annual Percentage Rate, or APR, is 3.936%.

The APR is very useful if you are comparing competing offers, based only on the rate and the points.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,678.78 -201.58 -1.19%
S&P 500 1,942.71 -27.36 -1.39%
NASDAQ 4,386.1690 -76.7330 -1.72%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs