Should I refinance my mortgage?
Many people are unaware of the impact refinancing to a lower rate can have on the amount of interest they pay over the life of their mortgage.
The general rule of thumb is that if you can reduce your interest rate by at least 1%, or close to it, you should definitely consider refinancing. Often times, you discover that not only do you have the potential to save tens of thousands of dollars in interest over the life of your loan, but you can also keep your monthly payment close to your current amount and possibly shorten the time it takes you to pay off the mortgage.
However, we typically do not recommend refinancing if you may be selling your house in the next few years because it takes time to recoup the costs of refinancing.
If you decide to refinance, we suggest beginning the process by calling your bank and/or your current mortgage company to find out what rates you could qualify for and what the total closing costs are estimated to be. You should always check with more than one institution because rates and fees can vary.
To help determine your possible savings over the term of your loan, please use this calculator tool.