05/20/2025
There are many factors for a homeowner should look at before they decide to refinance their home loan. If your goal is to lower your monthly payments, then establishing your Breakeven Point is critical to a successful, smart refinance. This is done by weighing: Monthly Savings VS Cost to Refinance.
Simply put, how long will it take you to recoup the money you will pay for the new loan with the savings from your lower monthly payments. If your break-even point is in the months, then it might be a good time to refinance. If it is going to take a number of years to hit your breakeven point, then it is probably not a great time to refinance. You also need to take into account, how long you plan to be in your current home. For instance, if you plan on selling in 2 years and your break-even point is 3 years, that is not a successful refinance.
Also, when considering a refinance (or purchase), the lowest rate offered to you isn’t always the best rate to take. What many borrowers don’t understand is that in most cases, the lower the rate, the higher the cost. So, finding that sweet spot is very important. Most borrowers can get a super low interest rate, but the cost to get that rate far exceeds the benefit. Many lenders push lowest rate to try and win business, instead of actually trying to put borrowers in a better situation. If you want to discuss your options with a loan professional, that is looking out for your best interests, contact me. Maybe now is the perfect time to refinance. If not, more than likely there will be a good time in the near future. At very least, you will know where you are at and can gain some knowledge on when a good time might be. Call or text me for a free, easy consultation.
