Time to Refinance?

by Porcupine Real Estate 02/20/2020

With mortgage rates at all time lows, you might be wondering if you should be considering refinancing your home. While it may seem like a great thing to do, there are a few things to consider before you decide. An obvious reason for refinancing to a lower interest rate is the monthly, and even more importantly the long term, savings you will get. Depending on the decrease in interest rate and the amount of the loan, you could see a savings of at least $50/month or $600/year or $6000/10 years.

Refinancing to a shorter term loan can also help save on the interest you pay over the life of the loan so if you can afford a 15 year mortgage the benefits outweigh that of a 30 year.

Some things to consider - If you have owned your home for a long time, your monthly payments are going more towards the principal of the loan, not the interest. Refinancing would cause you revert back to monthly payments of more interest than principal, losing the equity that you have built in your home.

You may be charged for an appraisal on your home which can be around $500. The bank will want to make sure that you are refinancing for an amount your home is worth so some out of pocket expense is required.

If you plan on moving in the next few years, refinancing may not be worth the amount you will pay in closing costs.

There are several refinancing calculators available on the web including at http://www.zillow.com/mortgage-calculator/refinance-calculator/ and http://www.smartmoney.com/calculator/real-estate/should-i-refinance-my-mortgage-1302835660427/.

No matter what you choose, being fully informed of all the options, costs and advantages/disadvantages is key to a successful refinance. Make sure you talk with you current lender, as well as other lenders to get the best refinance possible.

 

 

About the Author
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Porcupine Real Estate

Porcupine Real Estate, led by Mark Warden, is the premier real estate agency for the liberty community. We work closely with our clients throughout the entire real estate transaction. Whether you are buying, selling, or investing, our agents will help to make the process as smooth as possible. 

Our agents live, work, and invest in Southern New Hampshire. We have helped clients from all over relocate to New Hampshire and we can help you find the perfect town and perfect neighborhood based on what you want. 

In order to make the liberty community as successful and powerful as possible, it’s important to support the people, causes and businesses that our community members represent. We practice that support every day and hope you will do the same by engaging our professional services.