does any know

[Jessica Waldrop]

When should you should refinance your home?

[Frank Ketchum]

When it will benefit you financially

[MCL]

I agree with Frank... Simply put, do it when it benefits you financially... I know it doesn't seem like a good answer but it is VERY complex...

You can refinance your house to where you have lower monthly payments but at the same time you will actually owe more on your house than you would have before you refinanced... Definitely sit down with your banker and run through various scenarios to see what suites your financial needs...

Also, ask your lender if they do "mortgage adjustments"... Adjusting your mortgage is like refinancing except for a few things:

1) You pay a slightly higher percentage... 2) You don't start over with your amortization... i.e. - if you have 20 years left on your mortgage you stay there instead of starting over at 30 years which you do when you refinance... 3) No closing costs... You will typically pay a couple hundred dollar "paper handling" fee from the bank and/or lender...

We were able to "adjust" our mortgage from a 7.5% 30-year loan down to a

6.25% 15-year loan for $500.00... That saved us about $200,000.00 but increased our payments by about $150.00 a month... Then two years later we adjusted again from the 6.25% 15-year loan to a 5.25% 15-year loan and since we already paid two years of the 15-year loan we still only had 13 years left to pay after "adjusting" the loan... That lowered our monthly payment by about $100.00...

Now, some friends of ours just refinanced and got 4.75%... They made fun of us for not refinancing at 4.75% since we "adjusted" at 5.25%... Well, even though we are paying a 0.50% high rate, we are actually saving more money because we are ahead two years worth of payments and we only had a $500.00 cash fee instead of $3000.00 worth of closing costs that are typically rolled into the loan...

Does this all sound overwhelming... If it does it is because it is overwhelming... Talk to your banker and/or lender and have them run through different scenarios and see what best fits your financial goals...

Good luck, Mark

[Charlie Bress]

The usual guideline is a 2 percent reduction. But coupled to that is the time you expect to stay in the house.

Do the mortgage calculation, see what the savings per month would be, then see how many months it will take to save enough to cover all the closing costs. You don't want to be selling before the costs are covered and you are really saving money. And don't ignore the fact that the interest payments will be lower and so will the size of the tax deduction you can take. That extra bit of tax is another cost of reducing the mortgage interest rate.

All this assumes that you are simply trying to reduce your payments and are not planning to change the size of the loan by withdrawing from the equity.

Talk to your lender. They can give you most of the numbers you need: old payment vs. new, closing costs (all of them some lenders will try to hit you up for fees that are not obvious at first glance).

Charlie

[Muff]

Jessica, good answers below, but just curious what is your current interest rate? Muff