top of page

Should I Refinance My Mortgage?

  • Writer: Art
    Art
  • Apr 23, 2020
  • 2 min read

Updated: Dec 21, 2021


Mortgage rates are incredibly low right now. You look at your mortgage rate and notice it is higher than the current offerings. But is it smart to refinance right now? How do you know if you should refinance your existing mortgage?


There are many factors to consider when it comes to whether or not you should refinance your mortgage, but I’m going to focus on one of the most common refinancing rules of thumb.


Pay attention to your break-even point.


Your break-even point is the moment (expressed in months) when the financial benefits of reducing your mortgage rate are greater than the costs associated with refinancing your mortgage.


Fortunately, calculating your break-even point is not difficult. To do this, take the closing costs of the new loan and divide that amount by the monthly savings.


Allow me to illustrate.


Let’s assume that, after refinancing, the new mortgage payment will be $150 less than your old mortgage payment, and the new mortgage comes with $3,000 in closing costs. This means your break-even point is:


$3,000 / $150 = 20 months


Your break-even point is 20 months. Should you take it? It depends. If you’re planning to move in less than 20 months, the answer is no. You end up losing money. However, if you’re planning to stay beyond 20 months, it may be a smart money move.


Of course, figuring out your break-even point requires that you receive accurate information about the new loan from your lender. So, make sure you get a breakdown of the new mortgage payment and loan costs. This document may be referred to as a Good Faith Estimate (GFE), Loan Estimate, or Closing Disclosure.


So, when considering whether or not you should refinance your mortgage, calculate the break-even point. The result can help you make a wise financial decision.



15 Comments


David Alan
David Alan
4 days ago

Great point about refinancing, it's crucial to ensure that you're making an informed decision based on your long-term financial goals. For people exploring ways to better manage their finances or even seeking government-related jobs, platforms like Neogov offer excellent opportunities to access resources that could help with your financial planning and career growth.

Like

Do you find it difficult to focus on your academic subjects? You're definitely not alone anymore!  Creating time between their schoolwork, family, and other activities is hard for many students everywhere. When asked, “Online Law assignment help?” the answer is accepted. Their experienced teachers are eager to help you complete your discussions, quizzes, tests, and assignments as accurately as possible. From a single course to an entire semester, their constant and informed assistance is provided. At any time, you can hire someone to complete an online course for you, so you are free from the burden of deadlines and let their professionals manage the work.

Edited
Like

geet
Apr 18

The beauty of Call Girls Service Gurgaon is its discretion and perfection. Every experience is tailored to suit your needs. Let our beautiful escorts guide you to a night full of passion and thrill. Reserve your unforgettable night now!

Like

Zack
Zack
Apr 11

This website https://ashoo.su/ is fantastic! The design is sleek and visually appealing, offering a smooth and enjoyable browsing experience. Navigation is intuitive, making it easy to find exactly what I'm looking for. The pages load quickly, and everything is well-organized, which makes the site feel efficient and user-friendly. Overall, it’s a great platform that provides an exceptional online experience.

4o mini

Like

We have a vast selection of attractive girls, so you will have a lot of amazing options when it comes to our escorts. Every Escorts in Delhi is prepared to make your experience sexy and delightful. Leave everything to our escorts once you hire them, as she will seductively turn every moment into a memorable experience.

Like

Join our tribe. Subscribe today.

Thanks for subscribing!

  • Facebook
  • Twitter
  • Instagram
  • RSS

© 2022 Christian Money Solutions

bottom of page