Quote:
Originally Posted by Holladay
I have refinanced our home a few times. I thought the school of thought is that it is worth doing if you can drop the interest by 1 point.
Currrently, ours is at %3.75. I see ads for %2.6. Is that enough to justify a refi. We have ~14 yrs left and the %2.6 is for 15 yrs.
Thoughts?
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I went ahead and did roughly that exact figure at 2.625 over 15 years.
I mean the math's pretty easy to run really. I don't recall what we saved by flipping our 30 year w/ 25 left on it at 4.1% down to the 15 at the 2.625, but it was six figures. Have us paid off by the time the kids are all 18.
Ultimately if you save more than the $3-5K in closing costs (and you definitely will if you're getting a full point over 15 years), then yes, it's worth it. I can't imagine rates will ever get too much lower than that and if they do, it won't be enough for you to care too terribly much (and besides, you could always refi AGAIN at that point if it dropped another 1/2 point or so. Again, the only 'waste' becomes the closing costs).
There's just so little risk for a potentially MASSIVE return.