| |
             |
|
|
 |
| |
|
| |
To Refinance or Not to
Refinance?
How do you know when refinancing your mortgage makes sense? The old rule of thumb was to wait until interest rates fell at least two percent below your current rate. That no longer holds true.
|
 |
|
One thing to keep in mind though: The interest rate isn't the only thing to
consider when shopping for a new loan. Refinancing, after all, isn't free.
There are the bank fees, the bills for a new appraisal and inspection, your
lawyer's fee - you name it. Here is a simple formula that can help you
decide whether or not it is time to refinance your mortgage. First, compute
the difference in your monthly payments between your current loan and the proposed new loan. For example using $100,000 as the loan amount, let's say your current payment at 10 percent is $877 and the new loan amount is $103,000 (that's $100,000 plus the cost to refinance). The new loan monthly payment at 7.5 percent is $720, a savings of $157 per month.
Now divide the cost of refinancing ($3000) by the amount you will save each month ($157). The result in this case is a little over 19 months: $3000/$157 = 19.1 months. So it will take about 19 months for you to break even. If you were planning to move in 12 months, this is probably not the best time to refinance. However, a smaller monthly payment might make sense to your family's budget.
|
|
|
|
Equal Housing Opportunity |
Smitha and Rahul Ramchandani
- The Townhouse Experts
Broker-Salesperson/Sales Representative | Keller Williams Towne Square Realty
55 Madison Ave - 4th Floor | Morristown, NJ 07960
Smitha Mobile: 973-953-7777 | Rahul Mobile: 973-615-6504
Office) 973-775-9646
|
|
|
 |
Site Last
Updated:
November 23, 2011 |
 |
|
|
|
|
Copyright Notice:
TheTownhouseExpert.com is a registered service mark. The information contained in this site is for general consumer use only. While all information is deemed reliable, it cannot be guaranteed. No portion may be copied or reproduced without the express written consent of Smitha and Rahul Ramchandani. All rights reserved. © 2006. By submitting your telephone number anywhere on this website you are consenting for Smitha and Rahul Ramchandani and their authorized representatives to contact you even if your name is on the Federal "Do-not-call List." Each office independently owned and operated. Each office independently owned and operated.
|
|
|
|
|
|
|
|
