"HOW MUCH LOWER DO THE INTEREST RATES NEED TO BE IN RELATION TO THE RATE ON MY CURRENT LOAN BEFORE REFINANCING MAKES SENSE? IS THERE A GOOD RULE OF THUMB OR A FORMULA TO FOLLOW?"
No, there’s really no mathematical formula that determines whether or not refinancing is right for you. In fact, although refinancing to get a lower interest rate is one of the most common reasons to refinance, it’s far from the only reason. With a refinance, you can:
Convert an existing adjustable-rate mortgage into a fixed-rate mortgage.
Change the term of your mortgage (for example, going from a 30-year mortgage to a 15-year mortgage).
Tap into your home equity in order to finance a large purchase such as a home improvement project.
Consolidate your personal debt (also known as cash-out refinancing).
Remove the private mortgage insurance requirement on your current loan.
With any refinance, your new interest rate will be an important factor and it’s something you should look at, but it shouldn’t be your only consideration and you shouldn’t view refinancing simply as a tool for lowering your monthly payments. To see how you can benefit from a refinance—beyond just saving money each month—contact your mortgage professional.
For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988. Licensed by the Commissioner of Banks - License No. MB2671