"Should I refinance?" is one of the questions I hear most. The honest answer is that it depends on more than today's rates - here is how to think it through.
What do you want the refinance to do?
- Lower your monthly payment - a lower rate or a longer term
- Pay the loan off sooner - moving from a 30-year to a 15-year term
- Take cash out - for a renovation, debt consolidation or a big expense
- Drop mortgage insurance - if your home has gained value
Work out your break-even point
Refinancing has closing costs. Divide those costs by what you would save each month and you get the number of months it takes to come out ahead. If you plan to stay in the home longer than that, it is worth a closer look.
Your home may be worth more than you think
If values in your area have climbed, you may have more equity than when you bought - which can open up better terms or let you remove PMI.
Every situation is different, so the best next step is to run your actual numbers. Reach out and I will put the options side by side for you.