Mortgage Refi Question - What would you do?

[B&Bforever]

We refinanced our house 3 years ago and our mortgage guy thinks he can do another refi again for 2% less than than what we have now.

My question is we want to sell in the next year or 2. Is it worth it to pay the closing costs and have a 30 year mortgage if we want to sell that soon?

Please help I don't know what to do.

Thanks

 

[minnie1928]

We refinanced our house 3 years ago and our mortgage guy thinks he can do another refi again for 2% less than than what we have now.

My question is we want to sell in the next year or 2. Is it worth it to pay the closing costs and have a 30 year mortgage if we want to sell that soon?

Please help I don't know what to do.

Thanks

You need two pieces of information, how much will you save in interest each month. And how much will your closing costs be? Divide the costs by the interest to determine your payback timeframe. If it's less than 24 months, then go for it.

 

[Darcy03231]

The "rule of thumb" when refinancing a house is to go down at least one percentage point and plan to stay in the house for 5 years to make it worthwhile to do.

If you only plan to stay in the house for another two years I don't think it would be worth it. I would figure out how much you'll save each month on the mortgage for the two years and what the closing costs will be (also factor in whether or not you need to pay any points) to see if it will really be worth it.

 

[mamaLori05]

It really depends on what closing costs are. We were able to refinance our house a few years ago with no closing costs. If the closings costs are low, then it's definately worth it!!

 

[KAYLI'S DAD]

Another thing you might be able to do is a streamline refinance. It really depends on the bank. We are wanting to move very soon and I just refinanced last week anyway because we went from a 30 year 6% to a 15 year 4.5%. I looked at the ammoritization schedules and compared them and by june of this year I will owe less on the new mortgage than I would if I stayed with the original loan.

 

[Swimalie]

The "rule of thumb" when refinancing a house is to go down at least one percentage point and plan to stay in the house for 5 years to make it worthwhile to do.

If you only plan to stay in the house for another two years I don't think it would be worth it. I would figure out how much you'll save each month on the mortgage for the two years and what the closing costs will be (also factor in whether or not you need to pay any points) to see if it will really be worth it.

It really depends on what closing costs are. We were able to refinance our house a few years ago with no closing costs. If the closings costs are low, then it's definately worth it!!

So true about the rule of thumb. There are always closing costs in the form of fees - title fees, filing fees, etc. You will be paying and unless you are planning on staying in the house for 5 years or longer, it is not recommended.