While talking with a friend of mine last week, he asked if he should refinance. There are many commercials about refinancing, but who can you trust and what information do you provide? This is not my friends area of expertise, as he is unfamiliar with the analysis process. So, he appreciated the help, as he did not want to be inundated with sales calls, extra questions, etc. By analyzing his loan information in 5 minutes, it was determined that his payment would decrease by more than $250 in a 30 yr loan, and the costs would be recouped within as little as 11.2. Wow, that is a great savings! What would you do with an extra $250 per month?
Are you considering refinancing? If you are, call or email your loan information to me. I will help you determine if it is the right time to refinance. Or, use the website below.
- Gather the following basic information:
- Original and current loan amount.
- Loan interest rate.
- Original and remaining term of your mortgage.
- Current income tax rate.
- Current estimated home value. I suggest using Zillow at http://www.zillow.com/
- The proposed rate.
- The proposed loan term.
- Estimated closing costs.
Input information into the following website:
The final determining question is how long do you expect to stay in the home? If you are staying in your home longer than it takes to recuperate the refinance fees, then it is in your best interest to refinance.
The breakeven analysis calculator will provide the answers.
In general, refinancing when current rates are lower than your rate by .50% or more is when the benefit begins.