Blog with MAE Capital

The way you can quickly tell tell if you can save money by refinancing your home is to determine if the costs of the Refinance will be recovered quickly.  For Example; If you refinance and it cost $4,000 (added to your loan or paid directly by you) and by spending this money you save $50.00 a month it will take you 80 months or 6.67 years to recuperate that money.  You also have to look at the last time you refinanced and determine if you have recuperated the costs from last time you refinanced.

Other factors you should consider are; how much time do you have left on your current note, and that if you stretched it back out to 30 years, you loose all the payments you made on the old loan and my have a higher principle balance.  You should also look at the possibility of Refinancing to lower your term (going from a 30 year loan to a 15 year loan).  From a financial planning point of view the sooner you pay off your home the less interest you will pay over time and the less interest you pay is long term savings for you.  One important planning tip for retirement is to have your home paid off and carry no debt and have money in the bank.  Paying off your mortgage early is the best thing you can do, as then you can putt the money you were paying your mortgage with into an investment that can make you money. 

As usual chime in and let me know what you think.