When does it make sense to refinance home given our situation?
deucedown asked:
I was just wondering if it made sense to refinance our 30 year fixed 6.25 home loan. We have owned our home for 3 years and 5 months. What does the interest rate have to fall to in order for it to financially benefit us to refinance?? Any help appreciated.
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I was just wondering if it made sense to refinance our 30 year fixed 6.25 home loan. We have owned our home for 3 years and 5 months. What does the interest rate have to fall to in order for it to financially benefit us to refinance?? Any help appreciated.
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I would compare your current monthly payment to a loan under current rates. The other thing to consider is potential closing costs on new loan. The other thing to consider is whether you intend to stay in your home for a while – like five years or more – especially if you have to pay closing costs.
Below is a link to a refinance mortgage calculator.
The question is not so much how low does the interest rate have to fall, but whether any lender will give you a fixed rate loan at a significantly lower rate of interest. Unless your credit is better than God’s and you have tons of equity in the home, I’d say you’re not going to get a much better loan in the near future.