I’m wondering if I should refinance my mortgage. I am 1 year into a 30 year conventional mortgage (physician home loan). Mortgage rates appear to have improved in the last year. My current balance is 460k with a 6.75% fixed rate. Thanks.
I haven’t rate shopped yet but was wondering if there is a rate drop at which point it becomes a no brainer. I have limited equity in the home as I am only one year into my mortgage and have only made the scheduled payments.
The old rule of thumb is that a refi is only worth it if >1-1.5% drop, as you have to pay many fees including new origination fees etc. The bank can give you a spreadsheet comparing your current amortized structure with the new loan with all fees so you can compare.
Typically worth it if rate drop 1% or more. These are not difficult numbers to crunch in general, Karl's mortgage calculator can give you the basics, use the advanced features and play around a bit. You can always email an independent mortgage broker (not just your current lender) and ask for soft numbers without a hard credit check and they should be able to give you relatively reliable figures. If you have PMI, would also try to pay it off at the same time. Make sure to figure 29 years of one vs 30 years of the other, if you're going to re-finance with another 30y loan, or to specify that you're only looking at refinancing what's left of the current loan.
If you're currently at 6.75% a refinance should be a slam dunk right now especially if you have over 20% equity but even if you don't.
you dont provide any actionable info.....so depends.
What rate were you offered?
I haven’t rate shopped yet but was wondering if there is a rate drop at which point it becomes a no brainer. I have limited equity in the home as I am only one year into my mortgage and have only made the scheduled payments.
Pretty much same, but 18 month at 6.875%
Yeah you can probably get in the range of 6% with a substantial credit to make the refi free or near free.
The old rule of thumb is that a refi is only worth it if >1-1.5% drop, as you have to pay many fees including new origination fees etc. The bank can give you a spreadsheet comparing your current amortized structure with the new loan with all fees so you can compare.
Typically worth it if rate drop 1% or more. These are not difficult numbers to crunch in general, Karl's mortgage calculator can give you the basics, use the advanced features and play around a bit. You can always email an independent mortgage broker (not just your current lender) and ask for soft numbers without a hard credit check and they should be able to give you relatively reliable figures. If you have PMI, would also try to pay it off at the same time. Make sure to figure 29 years of one vs 30 years of the other, if you're going to re-finance with another 30y loan, or to specify that you're only looking at refinancing what's left of the current loan.