The Rule of Thumb Has Changed. These days, banks are charging astronomical fees for refinancing (hello bank profits!), and there are many people for whom it would take literally 5 to 6 years to pay off the costs of the refinance with their "savings.".
Rule of thumb – Idioms by The Free Dictionary – COMMON A rule of thumb is a general rule about something which is right in most cases. com, a leading consumer banking marketplace on the Internet, says that insisting on a 2% or 3% rate drop before refinancing is an old rule of thumb that no longer applies.
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Today, a rule of thumb is not enough to make a decision. Instead, divide the cost of refinancing by the monthly interest you’ll save with the lower rate (adjusted for lost tax deductions).
What makes this rule of thumb wrong is that it completely ignores the impact of the refinance on how rapidly the borrower will pay down the loan balance. The proper way to determine whether refinance.
A general rule of thumb is that it can be worth the money to refinance if you can. how much loan do i qualify for average cost to refinance a mortgage Refi Ripoffs: How to Cut Bank Fees – CBS News – paying close attention to fees-particularly for title insurance-when refinancing a home mortgage, can save hundreds of dollars.
Whenever interest rates fall, many homeowners wonder, should I refinance my home? Taking advantage of lower interest rates is a favorite reason for refinancing, but there are many other reasons you may want to refinance your mortgage.
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Another common refinance rule of thumb says only to refinance if you plan to live in your home for "X" amount of years, or only to refinance if you’ll save "X" dollars each month. Again, as seen in our example above, you can’t just rely on a blanket rule to determine if refinancing is a good idea or not.
The general rule of thumb is if you can reduce your current interest rate by 1% or more, it is worth it to do a mortgage refinance. And many people are happy to follow this rule as long as it lowers their monthly payment or lets them take out some cash, without digging deeper into the numbers.