Photo courtesy of The Associated Press/Carolyn Kaster
Reports surfaced this week that Vice President Joe Biden refinanced his personal home mortgage last year, taking advantage of record low interest rates to secure a 3.375 percent rate. Since the home's value is assessed at more than $500,000, this will save him at least $6,000 a year. While we could speculate for days on what Joe Biden might do with an extra six grand, can you imagine what you could do with $6,000 savings a year?
Regardless, it's hard to argue with refinancing to lock in a lower rate and save thousands of dollars over the lifespan of a loan term. As certain Vertex loan advisors would say, it's a "no-brainer." If you can reduce your interest and payments - while covering your closing costs with a lender-paid credit - it makes sense every time.
In other news, Congress members are debating whether to dissolve mortgage giants Fannie Mae and Freddie Mac in an effort to reduce government involvement in the home financing business. Naturally, congressional support is mixed.
As it stands, it appears unlikely the proposed bill will garner enough votes to pass the Senate, but that doesn't mean the idea won't be revived in an altered form. Some fear that eliminating Fannie and Freddie could translate to higher premiums for borrowers under modified lending structures. Others argue it could make the mortgage lending industry more resilient in the face of volatility. Either way, you can probably bank on hearing this issue debated further.
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