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.
Answers | 2
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.