Question by Amy S: We have an FHA mortgage at 5.625% Is now a good time to refinance our mortgage?
I live in Allegheny County in Pittsburgh PA. The ultimate goal is to save money on our mortgage. We have owned our house for almost 5 years. I also hope to roll any closing costs into the mortgage. Any help would be greatly appreciated!!
Answer by Cold
Don’t re-finance unless you can get at least 1.5% cheaper.
Why do you ask?
Closing costs – they are a monster.
It will take you 5 to 7 years just to break even.
Also some people re-fi for a longer term which is a long-term financial mistake.
You just increase the debt you have in your home.
Your goal is to have a home paid off well before your retirement.
Google: Should I re-finance my home calculator
Do about 5 of them and take down notes.
Keep the term of the loan the same – don’t make it another 30 years.
And never consider signing an ARM or 5/5 or 5/1 – banks are still pushing these scam products.
To save money, just make one extra payment towards your principal a year.
This will cut down a mortgage by about 7 years – great savings tool…
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