Home Mortgage Refinancing Guidelines

Home Mortgage Refinancing Guidelines

Here's a quick checklist of home mortgage refinacing guidelines you can use to quickly estimate the possibilty of lowering
your monthly mortgage payment
lowering the overall interest payments over the life of the mortgage or paying off your mortgage sooner. We've also included a handy home mortgage refinance calculator at the bottom of this page were you can

How long do you plan on staying at your current address?
If you don't plan on staying in your current residence for at least 5 years, then it will be pretty hard to recover your costs unless the mortgage refinance gives you a 2-3 percent drop from your current rate.

How long before the savings break even with the costs?
With home prices up Nationwide, it's not uncommon to carry a $250,000 30 year mortgage for middle income homeowners. A refinance for $250,000 with a 1 point drop in the interest rate will save about $2040 a year.

If your closing costs come in around 10K, you could recover your costs in about 5 years. Don't forget that although points paid are part of your closing costs, you'll get a tax benefit on a percentage of the points paid as an interest expense. Remember to figure in that savings when you calculate your recovery period.