In the midst of a global pandemic and a rocky political climate, there’s so much negative news that we are exposed to every day. However, one of the positives of the end of 2020 and the beginning of 2021 is that mortgage interest rates are extremely low, and the housing market is booming. If you’re a homeowner, you know how much pressure there is to meet monthly mortgage payments along with all of your other pressing financial obligations. For homeowners struggling to meet mortgage payments or other debt requirements, taking advantage of favorable current mortgage interest rates by refinancing your home mortgage may be the ticket to staying out of bankruptcy. If you are considering filing for bankruptcy relief during this uncertain time, Behm Law Group Ltd. can help you navigate the legal process and receive long-term, effective debt relief in Marshall, MN, and the surrounding area.
Those who have steady incomes but are finding it difficult to meet their monthly financial requirements may be considering Chapter 13 bankruptcy to reorganize their debts into a manageable repayment plan. Homeowners with steady incomes are also most likely to benefit from refinancing their home mortgages. A refinance with current interest rates could save homeowners several hundreds of dollars with each payment. The resulting savings could be significant enough such that the money saved could effectively be put into paying off several other debts that might otherwise force a homeowner into filing for bankruptcy relief.
Approximate Mankato mortgage rates as of November 2020 for a $250,000 loan
| Loan type | Rate | Points | APR | Monthly payment |
| 15-year fixed loan | 2.1% | 0.56 | 2.4% | $1,300 |
| 20-year fixed loan | 2.5% | 0.84 | 2.7% | $1,060 |
| 30-year fixed loan | 2.6% | 0.75 | 2.8% | $800 |
| 5/1 ARM variable loan | 2.4% | 0.89 | 2.7% | $780 |
| 7/1 ARM variable loan | 2.5% | 0.76 | 2.7% | $790 |
| 10/1 ARM variable loan | 2.6% | 0.76 | 2.8% | $800 |
For a conventional loan, refinancing may cost around $3,000 to $4,000, but that cost would be wrapped into your refinanced mortgage, so it won’t typically impact the amount of cash you have on hand at the time of the refinance. The only common factors that might prevent qualification are a low FICO score due to missed mortgage payments, too many debts, other than your mortgage, with high balances or low self-employment income from this year.
While saving $100 to $300 a month on a refinanced mortgage might not seem like a large amount, it’s a significant enough of an amount that many homeowners may use to repay other debts and financial obligations that they might not otherwise be able to pay. Those minor monthly adjustments can be key in preventing the stress and budget shortfalls that can lead one into having to file for Chapter 13 bankruptcy relief.
Chapter 13 or Chapter 7 bankruptcy can be highly helpful options for those struggling financially who are unable to refinance their mortgages and are unable to make other helpful budgetary adjustments. To learn more about finding debt relief through bankruptcy in Marshall, MN, and the surrounding region, contact Behm Law Group Ltd. at (507) 387-7200 or email stephen@mankatobankruptcy.com.
