Is refinancing worth it ? You may save money in refinancing, but it doesn't always make good financial sense. As a general rule, refinancing is worth while if your current mortgage interest rate is at least two percentage points higher than the prevailing market rate. This rule is used as a general idea when comparing the costs of refinancing a mortgage against the savings that can be gained by refinancing.
How long do you plan to stay in your house ? It takes at least 3 years to realize fully the savings from a lower interest rate, considering the costs of the refinancing.
Refinancing may be good for homeowners who want to get out of a high interest rate loan and take advantage of lower rates. However, additional fees make this undesireable unless you stay in your house the lenght of time needed.
Adjustable Rate -vs- Fixed Rate
If you have an adjustable rate mortgage (ARM) and want a fixed-rate loan because of a fear of rising rates, you may want to consider converting to an ARM with a lower interest rate with better payment caps. However, a fixed-rate loan may be what you need. Call me so I can help you with this decision.
Need the cash ? If you want to draw on the equity you've built up to get cash for a major purchase, to purchase an additional home (rental income or a vacation home), for your children's education, or to pay off high interest credit cards, then call me (916.853.0224) so I can assist you in determining if refinancing is worth the costs. I am here to help you get the right loan for you. |
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The information contained in this refinancing tip is intended to help you ask the right questions when considering refinancing your loan. It is not a replacement for professional advice. Please call me (916.853.220) or talk to a real estate agent, an attorney, and other advisor about lending practices, mortgage instruments, and your own interests before you commit to any specific loan.
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