Is refinancing worth it?
Refinancing costs money. Like buying a new home, there are points and fees to consider. Usually it takes at least three years to recoup the costs of refinancing your loan, so if you don’t plan to stay that long it isn’t worth the money. But if your interest rate is high it may be smart to refinance to a lower interest rate, even if it is for the short term. If your mortgage has a prepayment penalty, this is another cost you will incur if you refinance.
Refinancing costs money. Like buying a new home, there are points and fees to consider. Usually it takes at least three years to recoup the costs of refinancing your loan, so if you don’t plan to stay that long it isn’t worth the money. But if your interest rate is high it may be smart to refinance to a lower interest rate, even if it is for the short term. If your mortgage has a prepayment penalty, this is another cost you will incur if you refinance. Use the reasons above as a guideline and determine whether or not refinancing is the right thing to do. You can also use our refinance analysis calculator to help you decide.
Refinancing costs money. Like buying a new home, there are points and fees to consider. Usually it takes at least three years to recoup the costs of refinancing your loan, so if you don’t plan to stay that long it isn’t worth the money. But if your interest rate is high it may be smart to refinance to a lower interest rate, even if it is for the short term. If your mortgage has a prepayment penalty, this is another cost you will incur if you refinance. Use the reasons above as a guideline and determine whether or not refinancing is the right thing to do. You can also use our refinance analysis calculator to help you decide.
Refinancing costs money. Like buying a new home, there are points and fees to consider. Usually it takes at least three years to recoup the costs of refinancing your loan, so if you don’t plan to stay that long it isn’t worth the money. But if your interest rate is high it may be smart to refinance to a lower interest rate, even if it is for the short term. If your mortgage has a prepayment penalty, this is another cost you will incur if you refinance.
Refinancing is sometimes a very worthwhile thing to do. You may think of your house as an investment. Unfortunately, you probably won’t see the return on that investment until you’re loading up the white Cadillac for the big move to Sarasota. There’s a more immediate way you may be able to make some money off your house, though: by refinancing your mortgage. Refinancing is when you take out a new mortgage on your home, at a lower interest rate, decreasing the amount of your monthly payments. In some creative refinancings, you can actually increase the amount of the loan for such Foolish pursuits as paying down credit card debt or making long-term investments in stocks. Mortgage interest is tax-deductible, so to calculate the effective yield of a mortgage, multiply the interest rate by your tax bracket. Then subtract that from your interest rate. Investors in a 33% bracket with a 7.5% mortgage interest rate, for example, are effectively paying a 5% mortgage interest rate. (7.5 x .33 = 2
