Your needs can change – so can your mortgage loan.
Tip: Find your break-even point.To calculate your break-even point based upon monthly payment savings, estimate your savings based on your new monthly payment after the refinance. Then divide the fees and costs of the refinance by your estimated monthly savings.
Here’s an example: Cost to refinance: $1,800
Monthly savings $100 = Break-even point of 18 monthsIn this case, if you planned on staying in your home for more than 18 months, the cost of refinancing could be worth it. After reaching your break-even point, your savings would
total $1200 a year.Bottom line, while reaching your break-even point may take some time, if you’re in it for the long haul, you may be able to achieve some serious savings by refinancing.