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when should you refinance?

My SIL refinanced her home after a year to get a lower payment . I have a 6% loan but i would still like lower payments if i could. any advice.


Asked by Anonymous at 6:24 PM on Nov. 17, 2008 in Money & Work

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Answers (4)
  • As a rule we never ever recommend that a client refinances if they are not going to gain at least 1% on their rate. The other things to consider are the amount of closing costs which will be financed into the loan...Equity in the property is another key factor as well as if you are just doing a "rate and term" refinance the percentage will be lower than if you get any sort of cash back or if you are wanting to do any debt consolidation.

    Answer by mamakirs at 6:40 PM on Nov. 17, 2008

  • Personally, I would only refinance if it is going to be 2% lower than your current rate and it is going to be a fixed rate. Also, In Palm Beach, you need to make sure that you refinance after 3 yrs or the real estate taxes go up based on the new appraisal - check with your county.

    Answer by Avon_Calling at 6:33 PM on Nov. 17, 2008

  • 6% is pretty good. like the others said, if you're not lowering by a significant amount, it's not really worth it.

    HOWEVER- if you have an ARM- refinance before it runs out! depending on your loan terms, your payment could as much as double over time.

    Answer by pugmama at 9:47 PM on Nov. 17, 2008

  • 6% is a pretty good rate, you won't get much lower and you will have to pay application fees, inspection fees, closing costs, etc. That just wouldn't be worth it to me. However like pugmama said, if you have an ARM then yes, refinance.

    Answer by slw123 at 10:28 AM on Nov. 18, 2008