Did You Know?: Should You Refinance Your Home Loan?**

Now may be a good time for you to refinance your home loan to potentially save you thousands of dollars over the life of the loan.

For the past ten months, mortgage rates have been low and continue to stay steady. At the time of writing, the national average annual percentage rate (APR) on a 30-year fixed mortgage is 5.31% (Informa Research Services Interest Rate Review). This average has stayed below 5.50% since late July and under 6.00% since December 2008. Use online rate tables to quickly see what low rates are available in your area.

Given the current low interest rate environment, refinancing your home loan may be a wise choice. By comparing the rate and term of your existing home loan to those which are available now, you can see if refinancing is a good idea.

Even a seemingly small decrease in the interest rate on your existing home loan can potentially save you a lot of money on a monthly basis. For instance, a 50 basis point (or 0.50%) decrease in interest rate from 6.00% to 5.50% on a 30-year fixed mortgage for a $200,000 loan could decrease your monthly principle and interest payment from $1,199 to $1136 a month. This is a savings of $63 a month, or an annual savings of $756.

Previously, homeowners were unable to refinance if they owed more than their home was worth — leaving millions of Americans stranded with unfavorable loans. The good news is that there are several government or lender-backed initiatives designed to help homeowners take advantage of today's low rates. One of the more popular programs is Making Home Affordable — which allows individuals to refinance their primary loan, even if they owe up to 125% over present market value. But hurry — these programs may only be available for a limited time, and there are a number of qualifying factors, so contact your lender for more information and to find out if you're eligible.