Most people look to refinance as a way to save money. However, there is more than one way to look at the cost savings of lowering your interest rate. One way is the initial savings in your monthly payment. Another is to look at savings over the life of your loan. A lot of my customers ask me “When is it worth it to refinance?” There is no right or wrong answer to this because each case is different. Look at what is important to you – Is the monthly savings now important? Or is saving interest over the life of the loan important? Use an expert to help you make this decision.
Hypothetically speaking, let’s say saving total interest is important and you have 25 years left on your mortgage at 4.00% APR with a monthly principal & interest payment of $750.00 and remaining balance of $125,000. By refinancing to a 15 year mortgage at 3.00% APR, you would save over $69,000 in interest over the life of the loan while having your payment only increase $113 per month!
I’d love to discuss options for you & I can be reached at [email protected] or 715-358-6939.