Whether or not refinancing your home loan at this time depends on the following factors…
- What is the purpose of the refinancing? Am you taking cash out? Shortening the term? Lowering my interest rate
- What are the refinancing costs
- How long do you plan to keep the home
- What is the refinance interest rate compared to my current rate
- How long will it take to recover the cost of refinancing
- Will my income support the refinanced loan amount
Anytime refinance interest rates are lower than your present interest rate you should consider a home refinance.
Let’s Run The Math Together
For every $100,000 of your loan balance, a one percent difference in interest rate is equal to $1,000 per year. If you have a loan balance of $300,000 and the interest rate difference is 1.5%, your annual savings from a refinance would be $4,500 or in monthly terms, $375 per month!