Did you ever hear the old saying that “Don’t refinance unless you could drop the interest rate by 2 percentage points.”
That rule of thumb lasted for a long time, until no-point and no-closing cost refinance was introduced. Then, the rule of thumb changed to “Refinance if you can save money monthly and also shorten the term of the mortgage. What I show my clients is the following calculator formula
in which if they refinance there current mortgage into a no-closing cost refinance mortgage and there payment goes down by what ever amount and they apply the savings monthly how they can shorten the life of the loan hence save huge on the interest paid out over the life of the loan. One thing you have to remember is you have to discipline yourself to stick to the plan. Other wise just shorten the term of the mortgage for example go from a 30 year to a 25 year or shorter term that you are comfortable with the new payment.
To help you determine your options and the many benefits of refinancing, please try the following other great calculators.
I hope that this information has been beneficial and if you would like to explore your refinance options further feel free to call us at Premiere Mortgage Services Inc. www.BainMortgage.com 978-422-2311 or 800-480-0545. We would be more than happy to share are expertise in whether or not refinancing makes sense.