Los Altos Town Crier » In today’s world where timing is everything, check your mortgage for a better deal

By Clyde Noel

Town Crier Correspondent

Every homeowner should look at his mortgage because available rates are as close to the lowest as they can get. Present timing is unique because we don’t know the future, or how soon interest rates will increase.

“The average homeowner who refinances his mortgage is the person who made his loan 24-36 months ago,” said Greg Lopez, of Diversified Capital Funding in Los Altos. “Home values have slipped and people come in to check on their current mortgage.”

Lower interest rates generally translate into lower mortgage loan rates, and refinancing your mortgage at a lower rate can save you a few bucks on every monthly payment.

Lopez said many people refinance to pull equity out of their houses to make home improvements and others use the money to finance vacations, consumer purchases and college education.

Deciding whether to refinance your home comes down to a basic calculation: Will your savings from reduced mortgage payments be greater than the up-front costs? Therein lie the guts of the refinancing decision.

If it costs $3,000 to refinance and you save $50 a month, it will take you 60 months to recoup the up-front costs.

Lopez mentioned current rates are low and include jumbo loans because of the high housing values in the Los Altos area. Diversified Capital’s current mortgage loans on a 30-year fixed are between 6 and 6.5 percent with no points. For 15- year fixed, the loan runs in the mid 6 percent range.

Another financier, Home Finance of America, as of Oct. 25, has rates for a 30-year fixed loan at 6 percent with 2.25 points and the APR (annual percentage rate) is 6.29 percent.

A 15-year fixed is 5.25 percent with 2.75 points and the APR 5.71 percent One-Year ARM (adjustable rate mortgage) is 4.75 percent with 2 points and the APR 5.99 percent.

You may have an adjustable-rate mortgage and find that you’re uncomfortable not knowing exactly what the payments will be - so you’d like to switch to a fixed-rate mortgage. For information, call Diversified Capital at 917-6688 or Home Finance of America, (800) 358-5626.