Is it worth it to refinance?

My current loan amount is 131,775. Started with 30 yr fixed in 2004 with loan amt 175,500 and 5.375%. I'm considering refinancing another 30 yr fixed at 4.625% and possibly paying extra with payments. Cost of the loan would be $2621. Is this a wise move? Should I refinance at all? Should I be considering other options?

2 Answers

Well, the trade off is always the interest savings versus costs. Without more details on your state, property type and value, anmd credit scores, it's hard to know whether $2621 in costs to get 4.625% is a good deal or not. Can say that it does not appear to be a remarkably great deal IF you're not in a high cost state, and don't have significant adjustments to your pricing (such as credit scores under 720, condo, waiving escrows, etc) I often structure my clients' loans so I can cover their closing costs, which means their savings are accomplished with them incurring no (or less) costs. Also keep in mind you've had that loan for 10 years. If you want to compare apples to apples, should be looking at 20 year terms. Another alternative might be to look at 15 years (which have a significantly lower rate than either 20's or 30's) since you mentioned paying extra anyway. More questions? Give me a shout, glad to help, and I do write loans in all states. Thanks Ted

If refinancing is going to save you money then it's always worth it to refinance. FHA Streamline, HARP Refinance are just a few of the great options out there right now.