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Refi my house
Well, the hot topic today is the financial markets and the downward pressure on the national mortgage interest rates. Everyone wants to know if they should refi my house now or wait. Mortgage rates are at the lowest level now than they have been for many years and everyone is thinking maybe I can lower my house payments.
I am going to keep everything real simple for clarification means so everyone can really understand their situation. You have heard many things in the past regarding your possibility of refinancing your present mortgage. People have said that you only refinance if you have a two point spread between your existing mortgage rate and the new mortgage rate you could obtain. Then some folks said do refinance if you could have at least a one point spread. The next question is how long do you plan on staying in your present dwelling. It is very important to look at the entire picture before making a move either way. Of course, now everyone is talking about the government assistance mortgage programs throughout the country.
The following is an example of a certain situation that will give you some guidelines. Lets assume that we are talking about a $200,000 loan. If you have an existing interest rate of 6 per cent and have a chance to get an interest rate of 5 per cent, your monthly mortgage payment will go down from about $1200 to about $1075 so you are looking at a savings of about $125 per month. If your refinancing costs are in the neighborhood of $3000, then it would take you approximately two years to break even on this transaction. In most cases this would only make sense if you are going to remain in your current residence for a longer period of time. Remember your refinancing costs could include lender fees, title insurance, new appraisal, document processing,etc.
Now, here is what nobody seems to ever talk about regarding refinancing. A major decision will really depend on your cash flow situation. If you are having a tough time making ends meet on your monthly finances, then the $125 difference on your house payments could be huge. So if that is the case, do not be so concerned about when you will break even, but you need to live in the present and the $125 savings could make all the difference in the world to you right now. Refi my house now or do I wait? You are really the only person that is qualified to answer this question correctly. I would suggest gong through all your finances very carefully and get some advice from a trustworthy source. After you have gathered all of your information you will be able to answer the question, refi my house now or do I wait.
One last item to remember is the government assistance mortgage programs throughout the industry will likely only benefit folks that are in a bit of a struggle with their mortgage. |
