Pennsylvania
Pennsylvania Refinance
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Normally a $100,000 loan at 6.50% interest will cost $632.07 /month. But if you refinance your Pennsylvania mortgage loan, it is possible to get a lower interest rate. For example, the same $100,000 mortgage, with a 5% interest loan will cost only $536.82 a month, a savings of $95.25 per month or $1,142.96 per year. Or you can change the loan to interest only so that you can buy a better house. For example, for the same $632.07 , with a 5% interest only loan, you can afford a mortgage worth $117,743 instead of only $100,000 .
For your Pennsylvania mortgage loan, would you prefer an interest only loan, which doesn’t pay any principal, or a traditional loan that pays both interest and part of the principal each month? The difference is usually determined by the rate of equity appreciation in your neighborhood as well as the percentage of investors versus the percentage of homeowners in your area. If the equity appreciation has traditionally remained strong in your neighborhood, or at least not negative, then an interest only loan might be worth considering. This will allow you to buy a better house for the same payment. If the percentage of homeowners versus investors is high in your area, then there is a strong likelihood that homes will not decrease in value, so again an interest only loan may be worth consideration. However, if the percentage of investors is high, for example over 10% of new homes are bought by investors, then you probably would not want to refinance with an interest only loan.
One of the more popular choices for loan refinancing has been the adjustable rate mortgage (ARM). An ARM is especially good for those homeowners who expect to move or refinance within 3-5 years. For example, you can get a 5/1 ARM that has a fixed rate for a period of five years. If you move or refinance your Pennsylvania mortgage loan before 5 years have passed, then you can save substantially on your interest charges.
