How To Know When To Refinance Your Mortgage

andrea is with us in Grand Junction hi

Andrea how are you hi how are you doing

better than I deserve what's up I just

wondered if you could walk me through

how I would know if it's beneficial to

refinance our mortgage if the interest

that you would save as a result will

repay the closing cost within a couple

of years so let's look at it what is

your current interest rate 4.25 okay and

you can probably get let's say three and

a quarter let's say you could say for

one percent okay so what is your loan


one hundred and sixty four thousand

okay so one percent is sixteen hundred

and forty dollars does that sound right

okay and so what are your closing costs

I'm not sure I haven't actually talked

to anybody I just know there's a lot of

let's pretend about it's pretend they're

three thousand two hundred dollars just

for fun okay

and if you save one thousand six hundred

dollars a year in interest as a result

of refinancing but your closing cost was

three thousand two hundred dollars it

would take you two years to break-even

does that make sense

thirty two hundred divided by sixteen

hundred is two you follow me okay

and so after two years you're making

sixteen hundred dollars a year until

then you're in the hole so if you're

gonna stay in the home three years it's

probably not worth messing with if

you're gonna stay in the home seven

years it's gonna be very beneficial if

you're gonna stay in the home 18 months

you're gonna lose money from having

refinanced using this using the example

we came up with okay your closing costs

might be a little more they might be a

little less but they're probably fairly

close to that on one hundred and sixty

thousand dollar loan it's not that huge

alone so but you know so you probably

have somewhere around a two-year

break-even period how long are you going

to stay in the house

right now we don't have any plans to

move we like the area that we live in

and we have a lot of family here and we

have a pretty steady job sometimes so

you think it's probably a five to

10-year plan anyway right yeah so you're

gonna make some money

having refinanced if my closing cost

estimate is fairly close okay then you

put on 15 year fixed okay okay and no

need to pay any points it doesn't help

anything okay thank you so much yeah go

zero points but you're what we did there

is called a break-even analysis how long

does it take you to break even on your

closing costs and are you gonna stay in

the property longer than that date and I

think you will I think you'll make money

I think it does make sense to refinance

in this situation hard to believe folks

were in a world where we're talking

about refinancing a 4.25 percent

mortgage and it actually makes sense

that's a weird world of these rates have

ticked back down they were up for a

little while and they they've climbed

back or they climbed they drop down

slipped back down they're not way down

but I mean they were at four to five

just 20 minutes ago feels like and

they've come back down in the threes

again and I get a daily quote sheet from

Churchill mortgage and so if you're you

know looking to refinance those numbers

I'm giving you or real and all the 3200

is not real I made that number up I

don't even deal what a refinance costs

will be I have an idea but it's I don't

know exactly so but the interest rates

that's where they're hovering is down

the low 3s right now on a 15-year

fixed-rate mortgage on a Fannie Mae now

we don't recommend FHA we don't

recommend VA much more expensive but a

traditional conventional 15-year

fixed-rate check Churchill mortgage they

can help you with the folks