|
Refinance Considerations
Is It Time To Refinance
|
|
10 of
10 Refinance Considerations
|
|
Traditionally, the decision on whether or not to refinance has meant
balancing the savings of a lower monthly payment against the costs
of refinancing. But in recent years, companies have introduced "no
cost" and low-cost refinancing packages that minimize or completely
eliminate the out-of-pocket expenses of refinancing. (These refinancing
packages compensate with a higher interest rate, or by including
some of the costs in the amount that is financed.)
With traditional refinancing, the most often cited rule-of-thumb
is that the interest rate for your new mortgage must be about 2
percentage points below the rate of your current mortgage for refinancing
to make sense. However, with the newer low- and no-cost refinancing
programs, it can be worth your while to refinance to obtain a smaller
reduction in interest rates.
How long you expect to stay in your home is also a factor to consider.
If you'll be moving in a few years, the month-to-month savings may
never add up to the costs that are involved in a refinancing.
|
