To Refinance or Not To Refinance Your Mortgage?

To Refinance or Not to Refinance Your Mortgage?

With historically low interest rates, the question of the day is....

                         to refinance or not to refinance?

Here are a few questions you may want to ask yourself before deciding if refinancing your

current mortgage is right for you...

  1.)  How much will you really save?  Depending on what your original mortgage rate was and the current mortgage rates are; if they are not much different in amounts, say 5.0% versus 4.5%, it may not bring your payments down much, it may not be worth to refinance your mortgage. 

  2.)  How long will you stay living in your home?  Usually 5 years is the benchmark; if you are planning to stay your home less than 5 years then you may not recoup the mortgage finance charges that are needed to refinance your mortgage.

  3.)  Do you qualify? It may depend on what your loan to value ratio is on your current mortgage, if your income has changed, and what your current credit score is, in determining if you even qualify to be able to refinance your mortgage.

  4.)  Are you close to the end of your current mortgage payoff?  If you are close to paying off your current mortage, it may not be beneficial to you to refinance into a new mortgage.

  5.)  Are you changing the length of your mortgage OR mortgage product?  It may be depend on if you are going from a 30 year mortgage to a 20, or 15 year mortgage OR depends if you are on going from an ARM or Balloon mortgage to a fixed mortgage product.  Those may be determining factors in deciding to refinance your mortgage.

  6.)  Are you able to pay extra towards the principal of your current mortgage loan?  If you are disciplined and have the funds available to pay extra funds towards the principal of your current monthly mortgage payments, you may want to choose that option instead of refinancing into a new mortgage.

      To help in determining what is your best option, check out Dave Ramsey's online Mortgage Calculator at his website at:


       then scroll down to the lower right of the homepage and click on the Mortgage Calculator link.  This is a cool feature that helps you see how much you could save by paying extra monthly towards your mortgage payments. 

OR use the link provided below...

       Also, do please note, it is recommended to consult your mortgage representative professional who can assist you in determining what will work best for you in your situation when it comes to deciding to refinance your mortgage or not.


Janice VandenBerg

Janice VandenBerg

Associate Broker
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