If you are a mortgage holder who was fortunate to buy their home with a low interest rate, you may not want to refinance your current mortgage. Maybe you bought your home when interest rates were much higher. Or you might have an adjustable rate mortgage loan and would like refinance to get better terms.
Should you refinance your mortgage?
This mini-course will answer some questions that may help you decide. If you do refinance your mortgage, the process will remind you of what you went through getting your first mortgage loan. This is because, refinancing a mortgage is simply taking out a new mortgage loan. You will go through many of the same procedures, and the same types of expenses, the second time around.
Will refinancing your mortgage be worth the time and expense? Refinancing can be worth your while, but it does not make good financial sense for everyone to do it. A general rule is that refinancing becomes worth while if the current interest rate on is at least 2 points higher than the current market rate. This figure is generally accepted as the margin where balancing costs of refinancing against the savings you incur. There are other considerations too; like how long you plan to stay in your home. Most sources state that it will take at least three years to fully realize the savings from your lower interest rate, given the expense of the refinancing. Depending on your loan amount and your particular circumstances; however, you may decide to refinance a mortgage that is only 1.5 percent higher than the current interest rate
To learn more, signup for our free course, “Five Things You Need to Know to Refinance a Mortgage” using the link below.