Plunging Mortgage Rates Lower Mortgage Payments 13% In One Year

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via: TheMortgageReports.com/Dan Green

So, how big is your mortgage payment? No matter how new or old your home loan is, there's a good chance you could save money with a refinance to today's low mortgage rates. FHA mortgage rates, VA mortgage rates, USDA mortgage rates and mortgage rates via Fannie Mae and Freddie Mac continue to plunge.

Even jumbo mortgage rates have made new lows. It's time to refinance.

Mortgage Rates Under 4%

Since 2008, aggressive Fed policy and a weak global economy have combined to push mortgage rates to previously-inconceivable levels. For borrowers willing to pay closing costs, most mortgage products have sub-4 percent options available.

By comparison, just 4 years ago, mortgage rates were in the 7s (and we were happy about it).

Heck, even last year, conventional mortgage rates were much higher than they are today.

In February 2011, after a big run-up, the 30-year fixed rate mortgage rate averaged 5.05% nationwide. At the time, analysts predicted that mortgage rates would move higher; housing experts predicted that home values would stabilize; and economists predicted strong domestic growth within the United States.

Two of the 3 were right.

The housing market leveled off and, in many markets, its recovery is apparent. The U.S. economy has added close to 2 million jobs and appears to be surer footing. Mortgage rates, though, in places like Fairfax County, Virginia; Chicago, Illinois; and San Jose, California have done nothing but drop. Precipitously.

According to Freddie Mac's weekly mortgage, the average 30-year fixed rate mortgage is now at 3.87% for borrowers willing to pay the accompanying 0.8 discount points plus closing costs.

Get A 13% Reduction In Your Mortgage Payment

For homeowners and home buyers with a long-term housing plan, today's mortgage rates are an incredible value as compared to even February of last year.

Last February, the 30-year fixed rate mortgage averaged 5.05 percent nationwide. If you're among the many U.S. households that bought or refinanced a home around that time, refinancing to today's rates at 3.87 percent would lower your mortgage payment by 13%.

Saving 13% saved on your mortgage payment is huge. Take a look at the math :

• February 2011 : $539.88 principal + interest for every $100,000 borrowed
• February 2012 : $469.95 principal + interest for every $100,000 borrowed

That's $69.93 monthly savings for every $100,000 borrowed. Mapping this to a real-life mortgage, then, a homeowner in San Diego borrowing at the local conforming limit of $625,500 would recognize savings of $437 per month just for doing a refinance -- or $5,245 per year.

The "break-even point" on a mortgage like that comes relatively quickly -- even after accounting for discount points and closing costs.

Mortgage rates have never been this low in history.

See How Much You Can Save With A Refinance

Mortgage rates can't be predicted so there's no promise that mortgage rates will stay low like this forever. In fact, there's mounting evidence that mortgage rates will rise in 2012.

If you plan to buy or home with low downpayment or with a big downpayment; or have plans to refinance this year, the longer you wait, the less likely it is that you'll get the great, low rates that today's mortgage applicants are getting.

You have to see today's rates to believe them.