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
amount
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