Does Your Refinance Math Add Up?

Is there a formula that determines whether it makes sense for you to refinance? Yes and no. The math isn’t the same for everyone, but it always revolves around the payback period…and shorter is always better.

To make your calculations, we must know:

  • Your current loan amount and interest rate
  • The interest rate of your new loan
  • Can the lock-in period be extended?
  • How long you plan to stay in your home

As a general rule of thumb, you should consider refinancing if you can recoup the finance charges within 14 months.

You may have heard it only makes sense to refinance if you can lower your interest rate by 1.5 to 2 points, but I find that’s not always the case. Every situation is different, and you deserve to know what your options are.

I’d be happy to meet with you to discuss whether refinancing now makes sense for you. Let’s crunch the numbers together.

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