We have a mortgage at an interest rate of 4.75% now. Should we try to refinance at a lower rate? The tax value of our house is $145,000.

Asked by pippiroberts

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Answered by Greg Fischer, Mortgage Broker in Manchester, NH
There are lower rates available, but that all by itself isn't a reason to refinance. Are you looking to save money each month? Build equity faster? Are you planning to move in the next few years?

The formula for determining when it is a good time to refi is:

Total cost of the new loan / savings each month = how many months do you need to save before you've ACTUALLY saved.

If your break-even point for cost / savings is a couple of years, and you expect to be in the house and loan for longer than that, it might make sense. It really depends on what your current balance is, how long you've been in the current loan and what your equity is...

Talk to a great local mortgage guy about potential savings vs cost and see what makes sense for you. | 12.07.15 @ 19:46
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$commenter.renderDisplayableName() — {comment} | 12.09.16 @ 19:35
Answered by David Skow, Mortgage BrokerPRO+ in Seattle , WA
Thanks for the post. More than likely - yes, but there are many other elements that will come into play to make the final decision. (value / credit score / loan balance / qualifying ability / occupancy /market value / type of loan you have now and the type of loan you want ) Contact a loan officer to discuss details and review options that you are presented. All the best. | 12.08.15 @ 20:00
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$commenter.renderDisplayableName() — {comment} | 12.09.16 @ 19:35
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