How much does the interest rate need to drop to make it worthwhile to refinance my mortgage? - refinance rules
Is there a general "golden rule"?
Thank you!
Monday, January 4, 2010
Refinance Rules How Much Does The Interest Rate Need To Drop To Make It Worthwhile To Refinance My Mortgage?
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3 comments:
It depends on your current level. The current average is 6.25%, when you more than you should look into refinancing, any point to save approximately $ 1,000 for funding of $ 100,000.
It depends more on the decline in interest rates only. We must also see to what extent the rate of refinancing of loans and so you pay for points. (the loan is generally $ 1,500 to $ 2,000 and often pay more points for the lower rate.) Calculate how much you save each month through lower interest rates, then you can see how many months it will pay the money for the new loans and points. If you think you move before refinancing bills are paid, so it's not worth refinancing.
We have tried to do, and decided not to refinance, because they are likely to move in 3 to 4 years and I have 5 years left to recover the money .... if we are together for 30-year mortgage, we've saved a packet for those 5 years, but you have to see how long you will be at home.
Nobody can really give a definite answer to this question without knowing, as follows:
a) The term of the mortgage loans outstanding (including the specific conditions):
i) What is the length of the word?
ii) How long the term of your mortgage - is very specific about the exact number of months?
iii) What does the mortgage indicated on the prepayment penalty at the beginning (ie the interest rate differential, 3 months of interest, etc..)?
iv if the mortgage contains no penalty clause, ie is required for the early repayment after a certain period in the contract (), after, say, the mark of 36 months)?
v) What type of mortgage that you currently (which is a fixed-rate mortgage or variable rate)?
vi) What is the interest rate you currently pay?
vii) How does the compound interest (eg daily, monthly, semi-annually, annually, etc.)?
viii) What is the exact balance of your mortgage after the last payment cycle before this change before?
b) the lender to another lender (Will, was forced to a new mortgage with the land office record)?
c) If at the end of the mandate, the responsibility has a simple assignment of the mortgage (because of new legal or otherwise re-registration is required)?
d) Is), the new lender is willing to absorb the costs of refinancing (the legal notice, registration fees and examination fees?
e) Finally, what (the new requirements of donors especially the interest rate, the period of composition, what) the exact amount of funding vis-à-vis the outstanding amount and the length of the word?
By the way, avoid contact with a mortgage broker, ostensibly to "help" on this issue so easily outwit you a mortgage with them.
I calculate returns and cash yields for fun, so I know how to help.
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