With news about the mortgage “crisis” on television every night, many people are scrambling to refinance their adjustable rate mortgages to a lower fixed rate. 30 year fixed rate loans are at outstanding rates right now. Do you have a fixed rate loan you are thinking about refinancing? It sure is tempting to think about going from a 7% fixed rate to a 5.75% fixed rate. Is it the right thing to do for you? Your monthly payment will certainly go down if you keep the same balance on your loan and only change the interest rate. There are other things to consider: What about closing costs on the new loan? Will you be paying those out-of-pocket or rolling the costs into the new loan? Are you consolidating any other consumer debts into your new house loan? How long are you going to stay in the house? (Really?)
There is no magic answer but there are many things to consider before going through another stressful loan process.
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