Mortgage rates have dropped significantly in recent months, and that means one thing for those who bought a home in the last couple years: It might be time to refinance. You might save hundreds of dollars a month depending on how much you owe. Here's how to get the process started. Learn more about sponsor message choices: podcastchoices.com/adchoices NPR Privacy Policy
Support for this NPR podcast, and the following message come from the UPS store, open this Wednesday.
Come into your local store today.
Most locations are independently owned.
Products, services, pricing and hours of operation may vary.
See center for details.
The UPS store be unstoppable.
You're listening to lifekit from NPR.
Hey, everybody, it's Marielle.
Mortgage rates on the whole have been dropping lately for a few reasons that we won't get into too deeply here.
But it, it has to do in part with the bond market and also with the Federal Reserve, the US's central bank, cutting interest rates.
Just a refresher here.
A mortgage is a loan.
You get to buy a house, and that loan comes with certain terms, right?
Like the mortgage rate that determines how much interest you have to pay on top of the cost of the house itself.
When you take out a mortgage, whatever rates and terms you've agreed to are generally locked in.
But there is a maneuver that allows you to get in on this falling interest rate action and possibly save a lot of money and interest, and that's called refinancing.
People refinance their mortgages for different reasons.
Sometimes it is to take advantage of lower interest rates.
Sometimes it's to borrow more money so they can renovate their house.
For instance, on this episode of Life Kit, I talked to NPR personal finance correspondent Laurel Wamsley about what refinancing entails, how much money you might save, how to decide if you should do it, and whether you should wait for rates to drop even more.