Refinancing into 15-year mortgage could save you money

MESA, AZ - With so many homeowners upside down, it may seem strange to think about refinancing.

But if you can do it, "the opportunity right now is incredible," said Amber Kovarik with Benchmark Mortgage.

Rates on 30-year mortgages are around 4.5 percent, while rates on 15-year mortgages are around 4 percent.

Kovarik said we're seeing those incredibly low rates because investors in an unstable economy are turning to bonds right now, and that drives down what you pay for a mortgage.

"Interest rates go up like a rocket and fall like a parachute, so when they do start to go up they'll go up fast," Kovarik said.

Depending on what your mortgage rate is now, it's possible a term refinance into a new 15-year mortgage could make your payments about the same as your current 30-year loan, potentially saving tens of thousands of dollars in interest over the life of the loan.

If you're under water, you'll be limited by your loan-to-value ratio, but, depending on your situation, refinancing could be your way to the surface.

"As long as the home is, you know, a long term home for you, it'll help you get back to that point by doing a 15 year loan," Kovarik said.

Kovarik believes rates like these won't last.

"As soon as we start to get some positive economic data coming out, the money's going to flow out of bonds and into stocks and interest rates are going to go up," Kovarik said.

Remember to always consider closing costs and any other fees when deciding if a refinance is right for you.