Refinance

When should I refinance?

It is often said that you should refinance when mortgage rates are 2% lower than the rate you currently have on your loan. Refinancing may be a viable option even if the interest rate difference is less than 2%. A modest reduction in the loan rate can still trim your monthly payment. For example, the monthly payment (excluding taxes & insurance) would be about $770 on a $100,000 loan at 8.5%. If the rate were lowered to 7.5%, the monthly payment would be about $700, a savings of $70. The significance of such savings in any scenario will depend on your income, budget, loan amount and the change in interest rate. We can help calculate the different scenarios for you.

Should I refinance if I plan on moving soon?

If you plan to stay in the property for less than a couple of years, your monthly savings may not get a chance to accumulate and recoup the loan originating costs. Let's say we charged $1,000 to refinance your loan, but it resulted in a monthly savings of $50. It would take 20 months (1,000 divided 50) to recoup the initial costs before you start to realize some savings. However, we may be able to waive all costs associated with the loan by charging a slightly higher interest rate. We will calculate all the different scenarios for you to help you determine if a refinance is in your best interest.