Loans and mortgages – Pick the right time to refinance

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Refinancing your home can save you thousands, but only if the time is right. Before you decide to refinance, ask yourself a few questions:

* How much will I save each month?

* How much will it cost to refinance, and will I live here long enough to make it worthwhile?

* Will the new term be the same or shorter than the term is now?

Experts say if you can drop your interest rate by at least one percentage point – preferably two – and plan to stay in the house at least 18 months, refinancing may be a good idea.

The refinancing will cost roughly $2,000, so figure out how long it will take before you break even and start saving. If you move out of the house before that time, it will actually cost you more to refinance.

Try using the Mortgage Refinance Breakeven Calculator at www.myfico.com. It’s a handy tool when you’re dealing with a lot of numbers. Click on Credit Education, and look in the Calculators section to find the Mortgage Refinance Calculator. Run your figures through the calculator to find out when you would start saving if you refinanced.



All the best,



Timben