Looking for morgage experts - when is it worth it to refinance?

[4forMe]

I was wondering if anyone could give me the rule of thumb for when it is worth the time and money to refinance.

We currently have a 15 year mortgage at 4.75% which will be paid off in 9 years. I am seeing rates of 3.75% with 0 points for a 15 year mortgage. Is it worth it for us to consider since we only have 9 years left on the loan? I know there are other fees involved with the closing so I'm not sure if the savings will be worth it.

 

[Darcy03231]

Rule of thumb is you need to go down on full percentage point in interest w/out any points and be staying in your home for at least two years before you start to save anything.

If you plan to be in your house for the remaining 9 years and can go down a percentage point w/out any points I would look into refinancing and taking a 10 year loan. That way you would be keeping the term about the same.

 

[DawnM]

Look at this calculator and see if you can plug in the differences and see how much you save. I don't know how much you currently owe or I could do it.

I play around with this one all the time! Just waiting for interest rates to drop even more as we have a 15 year with 4.37%, but still have 14 years left.

http://www.bankrate.com/

Go up to "calculators" and you will find them.

Dawn

 

[DawnM]

I just did a quick Bankrate.com amoritization of 100K and for a 15 year loan the interest is 40K at 4.74% and 30K for interest of 3.75%.......

 

[powelweb]

If you are just looking to reduce interest costs over the life of the loan, you can simply prepay your mortgage so that it will be paid off sooner.

If you need to reduce your monthly payment, you'll need to refinance in order to actual change the minimum required each month.