Health
Home Refinance: Weigh the Options
Thinking of refinancing your current mortgage as fixed rates linger around 30-year lows?
Cindy Conger at the International Association for Financial Planning says there are other factors to weigh in addition to the current rates. They include:
--The number of years remaining in your current mortgage. If you're at eight years or more on a 15-year mortgage, you probably shouldn't refinance. You'll only extend your mortgage another 15 years, and you most likely won't come out ahead financially in the long run.
--The number of years you plan to stay in your home. Three years is the pivotal point. If you plan to stay in your home for at least three years before moving to another house, you should consider refinancing.
If you plan to move within the next 10 years, you should think about an adjustable-rate mortgage, Conger says. With this type of loan, you should pay off the refinancing costs before your adjustable rate begins. Make sure the refinancing fees are not excessive and that you can quickly recoup them.
If you decide to refinance, you may find it beneficial to pay for a home appraisal. If the new loan is less than 80 percent of your home's value, your lender may be willing to drop mortgage insurance, which can save from $25 to $125 on monthly payments.
Cindy Conger at the International Association for Financial Planning says there are other factors to weigh in addition to the current rates. They include:
--The number of years remaining in your current mortgage. If you're at eight years or more on a 15-year mortgage, you probably shouldn't refinance. You'll only extend your mortgage another 15 years, and you most likely won't come out ahead financially in the long run.
--The number of years you plan to stay in your home. Three years is the pivotal point. If you plan to stay in your home for at least three years before moving to another house, you should consider refinancing.
If you plan to move within the next 10 years, you should think about an adjustable-rate mortgage, Conger says. With this type of loan, you should pay off the refinancing costs before your adjustable rate begins. Make sure the refinancing fees are not excessive and that you can quickly recoup them.
If you decide to refinance, you may find it beneficial to pay for a home appraisal. If the new loan is less than 80 percent of your home's value, your lender may be willing to drop mortgage insurance, which can save from $25 to $125 on monthly payments.
