4 Signs You're Paying Too Much For Your Mortgage

While it can be an incredible opportunity to build wealth, buying a house at the Lake of the Ozarks is major expense initially. Depending on your mortgage situation, it may be a significant ongoing expense as well. Since current mortgage rates are still hovering around record lows, now may be a good time to consider refinancing if you believe you may be paying too much for your existing mortgage. Here are a few signs that your current mortgage rate may be unnecessarily high.

1. Your Credit Score Has Improved Since You Purchased
Your and your partner's credit score have a huge impact on your mortgage rate. The higher your scores, the more reliable you seem and the lower interest rate you will probably be able to get. If your scores were lower at the time that you purchased, you may have gotten locked into a higher rate. If your scores have improved since your initial purchase date, refinancing and locking in a lower rate may be beneficial.

2. Your Interest Rate Is Above 4.5% Percent
If you bought your home in or before 2014, it is entirely possible that you were approved for an interest rate at or near 4.5% (or higher). At the time that you closed, you were probably thrilled about securing such a low rate. However, interest rates dropped even lower in 2015. If your current rate is above 4.125% or 4.5%, it may be worth talking to a lender to see if you could be able to secure a lower rate.

3. Your Income Has Increased Since Your Purchase Date
When most people first buy their homes, money is understandably a little tight. Since they can't completely predict what their other expenses will be (utilities, repairs, maintenance, etc), most buyers want to keep their monthly payment as low as possible. If your income has increased since you purchased, you may have more room in your budget to dedicate to your mortgage payment (especially now that you have a better understanding of what your other expenses are). Now could be a great time to consider refinancing and switching to a 15- or 20-year mortgage. While the monthly payments will probably be higher, you may be able to lock in a lower rate and significantly reduce the overall amount paid in interest.

4. You Have An Adjustable Rate Mortgage That Will Soon Adjust
If they only think they will be in their home for a few years, some buyers opt for an adjustable rate mortgages (ARM). Adjustable rate mortgages often offer lower interest rates for a set amount of years, after which they will adjust to match the current market rate. Because it is impossible to accurately predict where market will go, adjustable rate mortgages come with a certain amount of risk. If you have an adjustable rate mortgage and are approaching the point where your rate will adjust, you may wish to consider refinancing.

Remember Me The Next Time You Are Ready To Buy Or Sell!
If you plan to stay in your home for several more years and any of these situations apply to you, refinancing could be a smart move. A professional mortgage lender will be able to help you carefully weigh the pros and cons. 

If you do not plan on staying in your same home much longer, on the other hand, I would love to talk to you! I have a great deal of experience selling real estate at the Lake of the Ozarks, and I would be more than happy to help you sell your home. If you plan to stay in the Lake Area, I could also help you find a new home that will better meet your needs. Visit my website or call me directly at 573-280-0484 to learn more.

Susan Spica
Professional REALTOR®

BerkShire Hathaway HomeServices
101 Crossings West, Ste. 202
Lake Ozark, MO 65049

Office: (573) 365-6868


Susan's Cell: (573) 280-0484