Mortgage Refinance Hinges on Clearing a Path to Lower Rates

NEW YORK (MainStreet) -- The housing market is heating up, and that goes double for homeowners looking to refinance and (hopefully) lock in a lower interest rate.

The scuttlebutt among mortgage rate insiders this spring indicated rates would be going up this summer, but as the U.S. inflation rate low (at a rock-bottom 0.0%), rates are still at reasonable levels.

Right now, the average 30-year mortgage rate in the U.S. stands at 4.27%, according to BankingMyWay's weekly mortgage rate tracker. A caveat though. Rick Thorpe, a Doylestown, Pa.-based mortgage broker, says the lowest mortgage rates are only available to those consumers with good credit scores - think a 700 FICO score or better.)

Still, good deals are still out there for anyone with decent credit and for anyone with good credit who wants to cut his monthly mortgage payments.

Put it this way. A $200,000 fixed, 30-year mortgage at 5.5% would cost a homeowner $1,135 per month. But at a lower mortgage rate, say 4.3%, the homeowner would cut his monthly home payment to $978. You'd also save almost $20,000 over the life of the loan.

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