Experts often say refinancing isn't worth it unless you drop your interest rate by at least 0.50 to 1 percent. But that may not be true for everyone. “Say you are refinancing from an adjustable rate to a 0.25 percent lower fixed rate. ... A quarter-point rate drop may also benefit someone with a large principal borrowed.
Figure out how long it may take for your refinance to pay for itself. To do this, divide your mortgage closing costs by the monthly savings your new mortgage will get you. If you're paying $5,000 in closing costs but you'll save $200 per month as a result of refinancing, it will take you 25 months to break even.
Saving $100 per month, it would take you 40 months — more than 3 years — to recoup your closing costs. So a refinance might be worth it if you plan to stay in the home for 4 years or more. But if not, refinancing would likely cost you more than you'd save. ... Negotiate with your lender a no closing cost refinance.
Mortgage refinancing is not always the best idea, even when mortgage rates are low and friends and colleagues are talking about who snagged the lowest interest rate. This is because refinancing a mortgage can be time-consuming, expensive at closing, and will result in the lender pulling your credit score.
The average 30-year fixed mortgage interest rate is 3.25%, which is a decline of 9 basis points compared to one week ago. ... You won't be able to pay off your house as quickly and you'll pay more interest over time, but a 30-year fixed mortgage is a good option if you're looking to minimize your monthly payment.
The mortgage rates trend continued to decline until rates dropped to 3.31% in November 2012 — the lowest level in the history of mortgage rates.
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