Question by Unknown: Is it worth to refinance my mortgage?
I have a 250k 30 yrs fixed mortgage. The current interest rate is 6.375%.
I want to refinance my mortgage, here is the rate that they are offering.
5.125%, .250% points with no origination fee (P&I Payment ,328)
or 4.875, .250% points with 1 % origination fee (P& I Payment ,367)
or 4.750, 1.250% Points, with 1% origination fee (P&I payment ,309).
The total closing cost is approx 6-7k.
Is it really worth refinancing? I plan to stay in the house for at least another 10 yrs. Which interest rate should I go with? I’m thinking the best one to choose is the 4.875 with .250% points buyin, and 1% origination fee. I choose to float on my rate, I don’t have to lock in until a few days before closing. Should I go ahead and lock in since the rate is good, or should i gamble and hope that the rate will go down ??
Best answer:
Answer by Judy
I heard don’t re-fi unless you can get 2 percentage points lower.
I went through all that once – trying to figure that out.
You know what I did?
I took that 10 grand I would have paid in closing costs and I put it towards the principal of my home.
Best thing I did in my entire life!!!!
Also one of the easiest.
Once a year, I tried to make a huge payment again to reduce the principal.
In the long run this can easily save you thousands upon thousands of dollars.
Note: Rates are not going down.
I could bet you the world on that.
As a matter of fact, rates could easily double in a couple of years.
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I’ve read to not refinance unless it is going to save you at least $100/month.
At this point in time interest rates are not going down drastically, so I don’t think you’ll get too much better than what they’re offering. 5.125% is the rate that was posted at my bank at the beginning of this week.
i agree with the loan you have picked, it is always better to pay less intrest, you need to do the math and figure out if the $7000 in closing, dosnt out way the savings in 10 years, which it dosnt so you are maling a good deal, and saving some of your hard earned money