Does it make sense to refi?

“Nate” asks:

Does it makes sense to refinance from a 6.28% rate to a 5.87% rate?

Nate:

There are a number of factors that go into figuring out whether it makes sense to refi, including how long you will likely stay in your home, and the amount of your closing costs.

To determine whether it makes sense to refinance, you’ll need to run a “break even” analysis to find out how long it will take you to recoup your closing costs. Then you will know how long you’ll have to keep your current loan before you start saving money. Your loan officer can do this for you, or you can try an online refinance break even calculator.

Of course, if your current interest rate is an adjustable rate, and you will stay in your house for a while, it may make sense to lock into a fixed rate anyway.

With the FreeRateSearch system, we use the same “rate sheets” that loan officers use to find out what loans are available to borrowers. We don’t have access to all the closing cost information, however. You’ll need to talk with your lender and ask him or her to provide you with a Good Faith Estimate, which includes closing costs, in order to run an accurate break even calculation.