I closed on my home 5 months ago with a mortgage rate of 4.875. Is it worth it to refinance? I see all the claims of 3 percent and lower.
Answers | 7
Refinancing to a lower rate always seems to be a great idea, but the question of it being "worth doing" is a different answer for everyone since it depends on many individual factors. One also needs to consider the cost to refinance as well as the length of time one intends to stay in the home. A common rule of thumb that many people use is refinancing when they can obtain a rate of one percentage point (or more) lower than their current rate. I don't personally subscribe to this philosophy because I have had clients where based on their personal circumstances (as mentioned above), a 1/4 percent drop in the rate was sufficient enough to make it "worth it". Lastly, you mention claims of "3 percent or lower"; this would appear to be offers for adjustable rate mortgages and not 30 year fixed rate mortgages.
Your best bet is to speak with a qualified loan officer that can look at your entire situation and make the right recommendations. Good luck.
Hope these thoughts help, if you have more questions, I write loans nationally, and can be contacted through my profile. Thanks, Ted