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When to Refinance Mortgage

Here are reasons to refinance your mortgage.

Lower your monthly payment with a lower interest rate:

One of the main reasons homeowners refinance is to lower their monthly payment. Lowering your interest rate by 1% on a $200,000 mortgage can save you $165 per month and more than $55,000 in interest over the life of the loan.

Get a lower rate and pay off your mortgage sooner.

Refinancing to a lower rate may allow you to shorten the loan from a 30- year to a 20-year. A $200,000 mortgage shortened 8 years will save more than $69,000.

Drop PMI or consolidate your first and second mortgage.

With better rates and accumulated equity, you could eliminate PMI and save hundreds of dollars each month. A higher-rate second mortgage could be paid off for additional savings as well.

Get out of debt faster by consolidating debt.

Pay off high interest rate credit cards and consumer loans. If you pay off $800 per month in debts with a mortgage that only goes up $200, you might be able to pay off your new mortgage in 15 years saving tens of thousands of dollars in interest. Besides, the mortgage interest could be tax deductible.

Make home improvements.

Improvements to your home can increase its value and make your lifestyle more comfortable.You can finance the improvements with a Home Equity Line of Credit or with the refinance of your existing mortgage.

Interest Rates Dropped – Should I Refinance?

Refinancing your mortgage loan can save you up to hundreds of dollars per month.

When interest rates drop, it’s especially tempting to refinance.

Is it true that mortgage refinancing only makes sense if rates drop at least two percentage points below my current rate?

The answer to this question differs for everyone. It depends mostly on how much you owe, how many years you have left on your mortgage and how long you intend to keep your current home.

Example: if you owe $100,000 and have 10 years left on your mortgage, a 2% lower rate would save you $100 per month. You can save the same amount each month with 3/8% rate reduction if you owe $400,000 for 30 years. The more you owe and the longer you plan on paying back the money, the more you will save by refinancing.


We can easily help you determine whether you should refinance… and at what interest rate. We’ll need to know:

  • roughly how much you owe on your current mortgage and
  • exactly what your current interest rate is

Have questions about your refinance? Call Charley Farley at (603) 471-9300 or e-mail.

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Charley Farley Home Loans

Office (603) 471-9300
Fax (855) 812-9282
650 Elm St Suite 600
Manchester, NH 03101


 

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