Profile picture for GladyDianne

I just efinanced in August at 4.375 for a 15 year loan. Should I refinance now again?

  • February 04 2012 - Columbus
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Answers (6)

Profile picture for shapiroamg
Ah Bill, Its not within a year. The question is FROM 2004!!!!

You have just resurrected a zombie thread.
  • February 24 2012
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I would agree with Brian Goetz below.

Each time you refinance you pay fees.  While those fees are not 'paid by you in cash out of pocket' there is still money being paid.  Just because you don't have to pay it in cash doesn't mean you aren't still paying for it. 

It's this 'behind the scenes' cash layout that you have to take into consideration.

If you paid $2,500 in Closing Costs last time you refinanced, and will pay another $2,500 again now - that's a total of $5,000 in fees in less than 1-year.  In order to recoup $5,000 in fees over less than 4-years you would need to save roughly $105 per month in your monthly payment. 

This is just an estimate - you would need to replace my fees listed above with the actual cost and then determine if the savings is worth the cost.  Just take the cost divided by the number of years you think it should take for you to re-coup the cost (I used 4-years as an example or 48-months).  This will give you the amount you 'would need to save' per month in order for it to be worthwhile.

Hope this helps you make an educated decision!
  • February 24 2012
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I would figure out the breakeven point.   How much are the closing costs divided by the monthly savings.   If it works out the 48 months or less, it is probably worth it to refinance.

If your loan is a conforming loan and meet lender guidelines regarding loan to value, debt ratio, credit scores...   you would expect to get a 15 year fixed rate in the low 3's.   It is definataly worth contacting a loan company to get an estimate.
  • February 06 2012
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GladyDianne, is the interest rate the APR or the note rate? I ask because the 4.375% rate on a 15 year loan would have been paying 5 points, in other words a note rate of 3.75% would have been typical 6-7 months ago. If you list the loan balance and principal & interest portion of your monthly payment then we can know the note rate and if worth refinancing.  
  • February 05 2012
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What is the loan balance?
  • February 04 2012
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Profile picture for Caveat Emptor
every time you refinance, you have to pay an upfront fee and it takes twice as long to pay off.

if you only have a 15 year loan, you'll be better off by increasing your payment 50/month rather than refinancing again.
  • February 04 2012
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