Is It Worth Refinancing Your Home?

As a retired mortgage banking consultant this question is often an exigent need when the homeowner notices interest rates dropping like a rock into a puddle; in some cases below four percent. Strange what an epiphany like that would have on a refinance wannabe who starts an immediate search for old loan paperwork to verify that he or she was still hanging out in the six to seven percent range. But, to be fair, back then that rate was the paragon of home financing.

Only you, the homeowner, can decide that if today and the timing is right, is it worth refinancing your home. If the answer is yes then you have a few tough questions to ponder after you dig out that old paperwork. You'll need it. It's time to compare numbers. For decades most honest and trustworthy lenders, when asked by a borrower, is it worth refinancing your home, would reply with the usual line that it was a good time if your new interest rate will fall at least two points below your current rate. Ergo, if your rate was seven percent and by refinancing you could lower the rate to five percent, the red and caution lights suddenly turned to green. That was then. Now is now. The lending market is in a world of hurt. Mortgage lenders offering borrowers low purchase and refinance rates, low closing costs, even low fees, just a one percent drop in an interest rate could be beneficial.

You won't have to look too far to find the right lender to answer your $65,000 question, is it worth refinancing your home. These people are like ants at a lakeside picnic. They're everywhere with window signs saying, come on in, the money is on the table. It's not hard to grasp the refinancing conundrum. It's simply asking the lender to pay off one loan and taking a new one even if it's a first and second mortgage loan payoff. Here's a suggestion. Before you make any calls or visit any lenders with your, is it worth refinancing your home question, go online and use a mortgage interest calculator from any lender of your choice. It's free. This will give you an estimated monthly payment plus the cost of the interest. Use various rates starting at 3.5 percent. Also compare various lender terms. Not all are the same.

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