Interest rates are really low right now. We are closer to 4.20% and 4.50%! Wow, that even sounds better than the 6.5% that we have been enjoying. If you have a higher interest rate than 6.5%, we are sure you are thinking maybe you should refinance. You will be getting information in the mail about refinancing and how cheap it is and how low of an interest rate, etc. You’ll find it on the Internet too and you know anything you read on the Internet has to be true!
There are some guidelines for you to follow if you think it is time to refinance. First, your interest rate and the current interest rate should be 2% variance. Just because you might be quoted that low of a rate, get it in writing. Remember you have to qualify for a refinance and it takes money to refinance. It is just like taking out a new loan. (Hint: you can reduce your title company charge on the title policy if you will go through the same title company that you bought and closed your house.)
Alright, if you have 2% difference, now you check with a lender and the fees will cost you $5,000. You are saving $125 a month in your payment, so it will take close to 3 years to see that savings! Do you see that? So make sure you are happy with your house and it fits your needs for your family and you for the next 3 years or we think you are wasting your money in refinancing. Yes, the lower payment is attractive, but count the cost first. Call us and we will be happy to consult with you and refer you to a mortgage consultant that we trust to tell you the truth and guide you right. By the way, one story we hear from those who are not our clients is that the rate was higher at closing that they thought and with the escrows, they ended up rolling more back into the mortgage! Also, remember if you turn the loan back into a 30 year mortgage, you have just gone backward?!
