When is it the right time to refinace?

Most people put off refinancing until its ultimately to late.  The reasoning usually is along the lines of not knowing how much it cost, thinking their house is upside down, or being afraid or embarrassed that they wont qualify.   The bottom line is a simple phone call to a local mortgage professional could wind up saving you thousands of dollars.  The worst possible thing that can happen is being turned down. Just some food for thought if you are still on the fence about refinancing.
  • October 30 2013 - Saint Charles
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Answers (7)

Profile picture for John Reeves1
I guess you can use an online refinance calculator to determine if you need re-financing

http://money.msn.com/home-loans/refinance-calculator.aspx
  • October 31 2013
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TD Bank closed a purchase mortgage for me last week with an ARM interest of 3.01%.  I was very impressed and then read the next day that rates were moving down.  It's a roulette game with this FED in place, but anytime you're anywhere near 3%, I think you're doing good.
  • October 31 2013
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Don't try to time the market and get the lowest rate ever.  The main thing to do is to talk with a local and trusted loan officer to see if the numbers make sense and save you money at a low cost. 
  • October 31 2013
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Profile picture for Primary Louisiana
I am not sure if you are referring to bringing your rate down vs. trying to time the bottom of the market. 
I would say there is not hard and fast rule as to the rate differential.  It would vary based upon a number of factors.  These factors would be expected time you are going to own that house, are you reducing the term or going back to 30 year, are you refinancing in order to reduce your monthly payment for cash flow reasons or save money over time, what are the closing costs vs monthly savings, are you taking cash out to pay off other debts.

If you are referring to timing the bottom of the market, most of my clients try to do this, but very few are successful.  When rates are this low, I would look at the potential for improvement vs a potential rate increase.  You know the old saying "pigs get fat, hogs get slaughtered".

Good Luck!
  • October 31 2013
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  • October 31 2013
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There isn't really a BEST time.   Each case is different.  The only way you can figure out if it's worth it for you, is to do the math.  There is no real rule of thumb!  I have people ask me all the time if their rate has to go down 2 points to make it worth while.  Nothing is further from the truth!  If you have a big mortgage, you need to bring it down a lot less to make it worthwhile than if you have a small mortgage.  Can you cut years off your mortgage and keep the payment the same?  Can you include some or all of your debt to reduce your monthly expenses?  Many times by doing something like this, you can reduce to a much lower term and STILL reducing how much you spend each month.  You should look at all your options and see what fits you! 
  • October 31 2013
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I tell my clients all the time that the best time to buy a home or to re-finance a home is when the interest rates are down. And they are still down. You can still get great rates in the 4% and 5% range. But, this won't last forever.

The second most important thing for home owners to understand, other than finding their dream home, is to find the best financing available. You will never pay more interest in your lifetime on anything other than your home.

My suggestion is to go online and play with the mortgage calculators and just see for yourself how much you could save and how much time you could reduce your payment period, by just refinancing your home based on your numbers.

Then, find a good lender and have them run the hard numbers, including any additional cost, and see how much it would improve your bottom line.

When its all said and done, its your money you are talking about, spend it wisely.

Steve Miller - Ultima Real Estate
  • October 31 2013
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