Low Mortgage Rates are Ripe for Refinancing

Mortgage rates are down again, making it easier to refinance

The yield on the 10-year Treasury note fell 2.46 percent during the first week in August, and mortgage rates dropped to the lowest levels for 2011. The average rate on a 30-year fixed-rate mortgage was 4.39 percent, down from 4.55 percent the previous week, according to Freddie Mac. The low rates mean that more homeowners may be able to take advantage of the mortgage rates and refinance. A refinance calculator can help you determine if refinancing make sense for you at this time.

Worries mount about economy

Many borrowers find themselves either unwilling or unable to qualify for a mortgage loan in the current economy. The recent scuffle over the nation's debt ceiling, continued weakness in the housing market and the stubborn unemployment rate (9.1 percent) have caused widespread concern that the U.S. could end up in another recession.

The global economy is also causing worry and stocks tumbled more than 500 points on Aug. 4, continuing a downward trajectory that had the Dow Jones Industrial Average off more than 11 percent from its high for 2011, according to the Wall Street Journal. The one-day drop was the largest since Dec. 1, 2008.

Mortgage calculators can help

There is no one-size-fits-all answer for what to do about refinancing in the current economic climate. If you have some home equity and good credit, refinancing now could be a good deal. Use a loan calculator to run the numbers and determine how much you could actually save by refinancing. Many homeowners who have been sitting on the sidelines as mortgage rates have fallen over the past year could lower their mortgage costs by refinancing--if they can qualify for a loan.

Being underwater on a mortgage means you won't qualify for a refinance. But you can contact your mortgage lender to see if there are options that can help you manage your mortgage payments. However, if you have positive equity in your home, you may want to shop around to compare refinance mortgage rates. Use a compare loans calculator to compare all the terms of any loans you are offered. Then use a closing costs calculator to understand exactly how much you'll have to pay out to refinance.