Question by : Mortgage refinance worth the effort?
My current Mortgage rate is 5.025 % and current rates are as low as 3.875% looks tempting but I’m concerned that points and closing fees will make the refinancing about as expensive if not more so than leaving the loan as is. My question is how high are these fees typically and at what point will it save me $ to refinance?
Answer by Angry Bird
Don’t do points.
I’ve done the math, and you are better off paying down mortgage principal on your own when you get extra cash.
Google: Should I Refinance Calculator
Also google: Closing costs calculator to re-finance.
Current 30 year average is 3.92%
Current 15 year average is 3.26%
Careful with banks that offer low ball park or no closing costs.
They usually charge a higher interest rate or have a lot of fine print.
Add your own answer in the comments!
If it is with your current mortgage company, most are doing a refi at no cost at all. With that said, you would have to have a perfect payment history with them (no late payments). You can negotiate everything.
It all depends on how long you’ll remain in the house. Rule of thumb is it’s worth refinancing if you can get a 1% better interest rate and intend to remain in the home for 5 years. Beyond that you’ll need to calculate where your break even point is based on your current mortgage payments and what they would be with a new mortgage plus the refi cost.
I am like Howard, once I am 1% higher I refi. How much this saves you depends on your total mortgage amount. Of course you also take into account how many more months you have to pay. If my property has 10 or less years on it I just leave it be.
Talk to some lenders, see what deasl you can get, then crunch the numbers on paper. If you won’t save money in a few years don’t do it.
Here’s a refinancing calculator for you to use: http://www.nationwidemortgagerate.com/mortgage-calculators/mortgage-calc-recoup.php