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Click on Detroit - Your Mortgage Matters

Channel 4 - Click on Detroit - You Mortgage Matters. Q & A with Dan Milstein, Rick Richter and Mike Hyman.

REAL ESTATE MATTERS: Reasons to refinance your mortgage

Q: If you have a fixed rate mortgage, why would you ever want to refinance if you plan to stay in the home for duration of mortgage?

A: That's a good question. There are a bunch of reasons you might want to refinance your 30-year or 15-year fixed rate mortgage. The first and best reason would be to save money.

When Sam purchased his first home, back in 1987, he took out a 30-year fixed rate mortgage with an interest rate of 12.75 percent. Any meaningful drop in the interest rates after he took out his loan meant he could refinance and save a bundle of money over the remaining years on his loan.

Over the last 10 years or so, interest rates have remained extraordinarily, almost historically, low. The 30-year fixed rate mortgage rate average has fluctuated between about 5.6 percent back in June 2009 and a low of about 3.3 percent in December 2012 according to the Federal Reserve Bank of St. Louis website. Today the 30-year fixed rate interest rate stands around 4.5 percent.

Kevin O'Leary shares his best advice about paying off your mortgage

"Particularly if you're starting out and you've just had your first child with your significant other, you want to pay off that mortgage. You want to get rid of that so you can start saving money and investing in your future," he says.

To do so, "Think about getting mortgages that don't have huge penalties to pay them off," O'Leary advises. "Very often you can get [a mortgage] that after a year, you can start paying off the principal on an accelerated basis."

O'Leary also says student debt is important to pay off.

"Those are the two big ones. You want to pay off that student loan, and you don't want to get stuck in too big of a mortgage because you have to pay that one off too. Pay those off as fast as you can, and your savings will start," he explains.

There is a caveat: It's important to pay off whatever debt has the highest interest rate first, which is usually credit card debt, he says. But mortgages and student loans are also critically important to pay off because they're larger sums, and often have extended terms. This means it's easy to get comfortable, which can be dangerous, according to O'Leary.

What does it mean to be "Upside down" , pertaining to financial

It means you owe more than the item is worth. Example you owe $80,000 on your house and it is only worth $50,000. Visa Versa would be "right side up" or owing $50,000 on the house and it is worth $80,000.