When is the best time to refinance your home?

Toy house and money on the graphs.

Toy house and money on the graphs.

Q: What should you know about refinancing your home? 

A:  Refinancing your home can be a daunting task.  Many people flock to refinance while mortgage interest rates are low, especially when rates are at 2% below their existing home loans!

Other dynamics, like when to finance, will depend on how long you plan to hold on to your home and whether you have to pay considerable fees to refinance.  It will also depend on how far along you are in paying off your current mortgage.

If you expect to sell your home shortly, you are not likely to recoup the costs you incurred to refinance.  And if you are more than halfway through paying your current mortgage, you probably will gain little by refinancing. Nonetheless, if you are going to own your home for say at least another five years, that is most likely a long enough to recoup any refinancing costs and realize real savings as a result of lowering your monthly payment.

In fact, if it costs you nothing to refinance, you can gain even more.  Many lenders will let you roll the costs of the refinancing into the new note and still reduce the amount of the monthly payment.  Plus, there are no-costs refinancing deals available.

Next time you are thinking of refinancing your home, you should  look into contacting a qualified lender. Feel free to contact me directly so I can let you know my list of approved lenders!

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