Refinancing My Mortgage Rate

Hi Kate, I'm contemplating refinancing my mortgage. Is there a rule of thumb for how much lower my new interest rate should be to make the process worthwhile? Lucas

Hi Lucas, Getting straight to the point, don't become overly focused on the interest rate during a refinance. There is more to consider!

Picture those birthday parties where you played with balloons. Squeezing one side popped out the other! I can hear you asking what balloons have to do with refinancing your mortgage! Maybe more than you think!

Three basic considerations should be included in every refinance decision.
1-- Interest rate
2-- Closing costs
3-- Mortgage payment

Refinancing based solely on getting a lower interest rate is like squeezing a balloon. Focusing merely on interest rates makes closing costs or monthly house payments pop out of proportion.

So what's the solution? Knowing how to balance rates with mortgage closing costs and payments. But let's face it! When was a course about good faith estimates ever taught in school? Well, it just so happens that I can help with that!

To determine whether you should refinance a mortgage, go to Understanding Mortgage Closing Costs where good faith estimates and other refinancing considerations are explained in everyday language!

Check out this gold mine of refinancing, mortgage, and home buying questions and answers by Ask Kate.

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