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Small Changes Make a BIG Difference - Is it time for You to Refinance

July 28th, 2010 4:07 PM by Kathy Delbridge

So, just how much do you need to lower your rate for a refinance to make sense?

Should I pay points? Should I roll the closing costs into the loan?

Bottom line is this.

  • You always want to be able to hit your "break even" point within 2.5 to 4 years ( at least that's what I hope for my clients).
  • Your Break Even point is established by taking the true amount of your closing costs and dividing those by your monthly payments. ( IE: $3500 in closing costs divided by $100 monthly payment savings, break even point is in 35 months)
    • In ths example, if the homebuyer stays in their loan for 5 years, then their loan saved them $2500, not to mention the payment they probably skipped when they refinanced, and their escrow refund they also probably got back).
    • This average client would be about $4500 - $5000 richer in 5 years.

For a little more in depth view, view the attached link, Small Changes Make a Big Difference

Hope you enjoyed this little "insight" and if you have questions or want to know if now is the time for you to refinance, give me call. The call costs you nothing but your time and it could SAVE You a lot.

Posted in:General
Posted by Kathy Delbridge on July 28th, 2010 4:07 PM

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