Should I Refinance My Home?

Real Estate Agent with Berkshire Hathaway HomeServices PenFed Realty RE Lic# 0225102216

Whether or not to refinance your current mortgage is an important decision to consider while owning your home.

The goal of refinancing should be to reduce your monthly mortgage expense (lower monthly payment) and reduce overall interest paid on your mortgage loan. Refinancing is not recommended for cashing out the equity in your home to pay bills or short-lived assets. This could put you upside-down on your mortgage in a declining market and/or erase necessary funds required to sell your home and pay off the mortgage balance at a later time.

Whether or not to refinance your home depends on several factors:

1)  Is your home mortgage balance less than or equal to the value of your home? Lenders will not loan more than the value of your home.

2)  Does your refinance require an appraisal?  If so, it will need to appraise for a value equal to or more than your current outstanding mortgage balance.

3)  Can you recoup the cost of refinancing within two years? or Is the refinance interest rate 2 or more points lower than your current interest rate?   Tip: Try to find a mortgage loan refi that requires no closing costs.

4)  What are your credit scores? If your credit scores are in good shape (720 and above) you'll get the best rates. If your credit scores have improved significantly since you established your current mortgage, you may qualify for a lower mortgage insurance rate (PMI), further lowering your monthly mortgage payment (if you have less than 20% equity in your home).

5)  Are you planning to move within 2 years? Plan on staying in your home at least 2 years if you want to refinance otherwise refinancing is not recommended.

6) Does your current mortgage or mortgages have any pre-payment penalties? An important factor to consider if you're considering refinancing.

For more information contact your loan officer or consult with your real estate agent.

Comments (10)

Diane Daley
Caron's Gateway Real Estate - Northumberland, NH

nicely posted I will re-blog this for more exposure... Best Wishes

Jan 21, 2009 07:15 AM
Tinker Hulsey
Century 21 Wright-Pace Real Estate - Jonesboro, AR
Century 21 Wright-Pace Real Estate


Great post! Welcome to active rain. I am a Century 21 real estate professional too. Good luck in 2009


Jan 21, 2009 07:51 AM
Reginald Potts
Berkshire Hathaway HomeServices PenFed Realty - Richmond, VA
Associate Broker

All, thank you for your positive responses. Thought this article would be appropriate in light of what we're seeing in the marketplace and the inquiries I've been getting from clients lately.


Jan 21, 2009 08:09 AM
Sergio Rebollo Jr.
Real Estate TeamMates - Miami, FL

Reginald.....Welcome to ActiveRain.  This is a great community to network with others as well a great place to learn from other's experiences and knowledge.  I've enjoyed it; I hope you enjoy it as well.

Sergio Rebollo Jr.
Exit Prime Realty
Coral Gables, FL  33134

Miami Short Sale Specialist - Profile

Jan 21, 2009 11:24 AM
Keith Elliott Jr
KEIRE Realty Group - Manassas, VA
Principal Broker/Owner

Hello Reginald,

Welcome to Active Rain and congrats on your first post! The opportunities to learn and network are incredible here. Best of luck to you!


Jan 21, 2009 01:07 PM
Kevin Sandridge
Signature Home Funding - Winter Haven, FL
Winter Haven Mortgage Broker


Hey Reginald, and Welcome to the Rain!

Kevin Sandridge, here. I'm honored to be one of the first folks to post a comment on your blog!

I joined the Active Rain community not too long ago myself and wanted to drop a line to share some of the good vibes and welcome wishes I have received already. 

If you haven't signed on with, please do!  I'd be honored to have you as a follower there!  Click on the big Twitter logo to visit my page!

A Bit About Active Rain

I'm very excited about this community - basically because folks seem so willing to help out, provide industry insight, and share their good news and experiences!

When I started out on Active Rain, I felt a little overwhelmed.  I hope the following points and suggested sites will help bring you into the mix!  Just my way of saying that I'm glad you're here.  One thing... be sure to create links to your site or listings page when you use words like "Realtor" or "Richmond Homes."  This will drive more traffic to you!


One:  Be sure to include a good amount of information on your profile page.  Check out the profiles on other Realtor's sites here on Active Rain who are listed as "Featured" or "Tops" in their area (look for high point totals).  You'll find that this will seriously boost your presence on ActiveRain - via the added points. 

Two: I urge you to keep blogging on this site!  You will be AMAZED at the awesome feedback you receive very soon after they hit the network!  I use Google Reader to subscribe to blogs that provide me with ideas about what I'd like to comment on - both industry wise and just for fun!  Check it out I am more than willing to step you through the site and to help you get a few more blog posts generated if you wish - as a way of adding some value and paying forward some good networking vibes!  :)

Three: Be sure to add in a good number of posts about what you think and consider pertinent regarding your area of expertise!  You'll notice that many if not all of the Featured posting bloggers here on AR do this.

Lastly, I do quite a lot of work via social networks, email campaigns, and relationship building.  If I can ever be of any assistance, don't hesitate to ask.

Here are a few great sites to visit (some of my favorites).  If you like the information they provide, be sure to let them know I sent you!

Looking forward to what you'll share with us here on Active Rain!  :)


Kevin Sandridge
Winter Haven, FL

Jan 22, 2009 01:09 AM
Dan Magstadt
Paramount Residential Mortgage Group, Inc - Lake City, FL

Congrats on your first post - Welcome to ActiveRain!!


Jan 22, 2009 02:46 AM
Jean Terry
Keller Williams Realty Spartanburg, S.C. - Spartanburg, SC

Hi and welcome to Active Rain, a great site to network, share, learn, and have fun. Good Luck.

Jan 22, 2009 12:13 PM
Sandy Childs
Keller Williams Realty - Spartanburg, SC
Realtor - Spartanburg, SC

Congratulations on joining Active Rain. This is a great professional networking and referral site. Our Team is working here in the Spartanburg / Greenville areas of South Carolina. We would be thrilled for any referrals you might send our way - or any referrals that we could send to you. Hope you enjoy this site as much as I do.

Jan 22, 2009 12:20 PM
Everard Korthals
---Preferred Lifestyle Advisors--- - Lancaster, PA
Mountain Realty

Welcome!  If ever you were to have any questions then feel free to contact us and we'll try to help. Please take a look at our blog. for links to valuable information in our sidebar that you can use to navigate this extensive network.  

We hope you have a great day, All The Best- 

Sincerely, ( Castellum Realty llc - Lancaster PA Real Estate )

Jan 22, 2009 03:57 PM