KANSAS CITY, Mo. — Melba Morris has lived in her Lee’s Summit, Missouri, house for seven years, but it’s just now starting to look like the home she wants thanks to historically low interest rates which allowed her to refinance her mortgage in order to pay for renovations.
Morris replaced carpet with hardwood floors, installed a new countertop and backsplash in the kitchen and is totally renovating a bathroom.
“I’m putting in a nice, tiled bathroom with a glass shower,” she pointed out.
By refinancing, Morris said she was able to get a lower interest rate and cashback on the equity she’s already paid off, all while maintaining the same monthly payment.
She did have to extend the length of her mortgage by five years. But she says it’s worth it, especially because she’s working from home and spending a lot more time in her house.
“It feels more like home now that I’ve gotten the things I wanted in it,” Morris said.
The Lee’s Summit woman is now paying 3 percent interest on her mortgage, which is practically unheard of.
“It sounds crazy. Even just a year ago, we were doing close to 4 percent,” explained Paul Madson, the executive vice president of James B. Nutter and Company.
He said mortgage interest rates are the lowest he’s seen in his 26 years of working in the mortgage business. Some people can get loans as low as 2.5 percent.
Madson said phones at Nutter Home Loans are ringing off the hook with people wanting to refinance, basically, rework their mortgage so they get a better interest rate than the one on the original loan.
He said the majority of customers are saving between $150 and $200 in monthly payments. He said some customers bundled other loans, like car and credit card, into their mortgage with a new, lower interest rate and have saved more than $500 monthly.
“We’re helping people every day. In these times when some people’s jobs are uncertain, this is a great way for people to get in there, get some money saved,” Madson explained.
He helped 41 Action News prepare this Rebound Rundown to help others refinance:
- Expect to pay about $1,500 in fees, appraisals and other charges to refinance, which would be made up within a year of saving from refinancing.
- Shop around between different lenders to find which one offers the best interest rate. People with better credit scores get better rates.
- Act before Dec. 1. Madson said mortgage giants Fannie Mae and Freddie Mac will be adding a 0.5 percent fee beginning that day.
- You can refinance your home multiple times per year to continually take advantage of falling rates.
- Don't refinance if you plan on selling your home soon.
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