Do the Math Before You Refinance
When is it a good idea to refinance a mortgage? Well, the short answer is this. You should only refinance when the money you save over the life of the new loan exceeds the money spend to refinance the loan. In other words, when your interest savings is more than your refinancing costs, it’s probably a good idea to refinance the loan.
I call this “doing the math” before refinancing, and I stumbled across a good article today that explains it in more depth. Some people understand mortgage refinancing better when they see hypothetical scenarios that actually go through the math … as this article does.
Related article: When Should I Refinance?
Posted on June 25th, 2007 by Brandon