When Is A Good Time To Refinance?

Mortgage and Lending with Group One Mortgage NMLS# 317641

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calenderOver the years, I have received many inquiries from past clients that ask: “Does it make sense to refinance my loan?” 

One of the easiest ways to answer this question is to do a quick cost-savings analysis, in order to find out how long it will take to recoup the closing costs with the new monthly savings. 

Most experts agree that there is a net tangible benefit to the borrowers if they can break even within approximately four years.  Here are some examples of different scenarios where it may make sense to absorb the cost of refinancing;


  •     If you can lower your rate or term.  A lower interest rate or shorter loan term can save you thousands of dollars over the life of the loan, by reducing the TIP (Total Interest Paid.)  However, because there are closing costs involved, you need make sure the savings justify the cost (as mentioned above.)


  •     If you are 62 years or older, a Reverse Mortgage can allow you to have an equity of line of credit.  Many seniors are finding that a Reverse Mortgage allows them to tap into their home’s equity, which is the most valuable asset most have, in order to live a less financially-burdened life.  Reverse Mortgage loans could allow borrowers to have access to an equity line of credit, without the need to make monthly mortgage payments. Since many seniors receive a fixed monthly income, it can become difficult to afford home loan payments, and therefore this product is becoming more and more popular. Visit our Reverse Mortgage website for more information. (


  •     If you’re current loan has mortgage insurance.  Mortgage insurance is for the lender’s protection and is required on many different loan types.  Many borrowers may have initially needed this type of loan to qualify due to credit restrictions, down payment needs, etc.  However, if your circumstances have now changed, you may be able qualify for a new loan that can eliminate the requirements for mortgage insurance.


  •     If you have a loan that has adjustable rate, interest only or balloon payment features.  These loans are traditionally used by borrowers as a short term financing solution, however many borrowers have had to keep these loans for longer periods of time than they originally expected.  These loans can have undesirable long term ramifications including increasing interest rates and payments.




Mark Loewenberg
KW of the Palm Beaches - Palm Beach Gardens, FL
KW 561-214-0370

very educational information Mark!  this should help folks with starting to look at the process, then once they call you, you can help them with the best available program!

Apr 07, 2016 08:59 AM