Mortgage Refinancing – Forget the 2 Percent Rule
Mortgage Refinancing – Forget the 2 Percent Rule
by Louie Latour
Many people tell you that you should never refinance your mortgage unless the prevailing mortgage rate is 2 percent lower than what you’re already paying. Forget this so-called rule of thumb for mortgage refinancing. The real test of whether mortgage refinancing makes sense for you is how long it will take you to recoup your expenses. Here are several tips to help you decide if mortgage refinancing is right for you.
You can determine if mortgage refinancing makes sense for your financial situation with a simple calculation. The first thing you need to determine is what your total costs will be for mortgage refinancing. This figure needs to include all of your closing costs and any other fees you have to pay when securing the new mortgage. Next, determine how much you will be saving with a lower monthly payment. Divide the amount the new mortgage will cost you by the amount you will be saving and this will tell you the number of months it will take to recoup your expenses.
For example, if your monthly savings after mortgage refinancing are $200 and your closing costs and expenses total $2,000, it will take you ten months to recoup your expenses before you realize any savings from the new mortgage. That’s really all there is to deciding if mortgage refinancing makes sense for your financial situation. There are of course other reasons for refinancing your mortgage even if your monthly payment does not go down. These reasons include cash out mortgage refinancing and any number of other reasons for choosing a new lender. You can learn more about your mortgage refinancing options, including mistakes you need to watch out for with a free mortgage tutorial.
To get your FREE six-part Mortgage Refinancing Tutorial, visit RefiAdvisor.com using the link below.
Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. To get your hands on this free video tutorial: “Mortgage Refinancing – What You Need to Know,” which teaches strategies for finding the best mortgage and saving thousands of dollars in the process, visit Refiadvisor.com.
Claim your free mortgage refinancing tutorial today at: http://www.refiadvisor.com
Mortgage Refinancing 2 Percent Rule
Article Source: http://EzineArticles.com/?expert=Louie_Latour
[tags]Mortgage Refinancing, 2 Percent Rule[/tags]
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