by Jim Carson
Question by dutchess: Can someone please tell me what refinancing a mortgage invovles?
I have a mortgage-I pay above the amount due each month-not much-but every little bit counts-
The mortgage rates seem good-is this what they call refinancing?(Only adults with a mortgage answer please!!!!!!)
Answer by Judy
Should I re-finance calculator
Generally if you can get 1 /12 % lower and you know you will stay in the home for 5 to 7 years it’s a good idea. This is a break-even point.
Don’t forget about all those closing costs.
Before you start paying off a mortgage always make sure you have at least 6 months worth of living expenses in a saving account and have all debts paid off including car loans.
In some cases, you are better paying down your mortgage than re-financing.
And for goodness sake – stay away from 5/5’s and 5/1 ARM’s – yes, banks are still pushing these scams.
Rates on 15 year mortgages are super low – if you decide to re-fi – good luck.
You will need equity in your home of about 20% – which will allow you to avoid that nasty PMI.
PMI is like throwing thousands away a year.
Make sure you have no credit card debt and check your reports at
Annual Credit Report.com
Average rates today:
4.52% on a 30 year
3.95% on a 15 year
They will fall down slightly in the next few weeks.
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