Refinance your Chicago Mortgage while Interest Rates are Low

With the Fed lowering the interest rate to effectively 0% a few weeks back we have all been waiting to see how the consumer mortgage rates will be affected in Chicago. Both the city and suburbs have been affected by the real estate housing bubble and many people who have 6-7% mortgage rates on their homes and condos would love to refinance their mortgage and save some money in this economy.

Just this week Jan 12th, marketwatch reported that 30 year fixed rate mortgage rates went below 5% and down to the lowest rate ever. I am surprised that they have gotten so low and see that marketwatch lists the average mortgage rate for a 30 year fixed rate loan at 4.62% now. Wow that is low. A 300K mortgage with 20% down and a 30 year fixed rate loan at 4.62% is $1,333.00 a month.

If that rate was 5.62% it would be $1,481.00. Low rates save you a lot of money and allow you to use those savings to make extra principle payments and pay the loan off faster which saves a lot on interest paid to the bank over the life of the loan. (remember interest is calculated on the entire loan amount each year, so the amount you really pay for your house over 30 years is usually about 3x the value)

I am not sure which mortgage refinance companies in Chicago can offer these rates though because so many of the banks are in trouble financially right now. Taking in less profit on loans would hurt their chance of recovery. Citigroup Banks is one that is giving higher interest rates like 5.5% on a 30 year fixed loan because of their current financial situation.

I hope that people living in Chicago can refinance their loans at the lowest rate possible and pay off their mortgage home loans quickly and own them outright. It is a difficult thing to do but owning your own home without a mortgage is one of the most rewarding things you can do and gives you so much financial freedom and saves a lot of stress. Look into how you can lower your interest rate and pay off your loan in a shorter time and get freedom from mortgage payments.

This article was written in 2009 when I was in the process of selling my own home and buying another. Please check with local banks/lenders/credit unions before making any decisions on a loan or whether to buy a property. The rates do fluctuate from month to month, so check back regularly.