When should I refinance my mortgage?
Answered by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Refinance when the savings clearly beat the cost. Good triggers: rates have dropped enough to recoup closing costs within a couple of years, you want to drop PMI, switch from an ARM to fixed, or consolidate higher-rate debt.
The old 'wait for a 1% drop' rule is a rough guide, not a law. We'll calculate your break-even and net savings before you refinance so the move actually pays off.
The right triggers
Refinancing makes sense when rates drop enough to lower your payment, when you want to remove mortgage insurance, when you want to shorten your term, or when you need cash from your equity.
A common rule of thumb is that a rate drop of about three-quarters of a percent or more is worth a look.
Run the break-even
The key is whether your monthly savings will cover the closing costs within a time you plan to keep the home. If you will move before you break even, waiting is better.
We do this math free. Reach out and we will tell you if now is your moment to refinance.