What is the best year to refinance in the life of a new conventional mortgage?

Asked by Visionsfunctions, Arlington, TX Wed Jun 22, 2011

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Gregorio Denny’s answer
Gregorio Den…, , San Diego, CA
Thu Jun 23, 2011
"It does not matter what year because that is not a factor at all... "

It's statements like that that are frustrating. The year DOES matter because of the way mortgages are amortized. If you only have 10 years left on a 30 year note, you are paying mostly principal at this point. If you refinanced to a new 30 year at this point, even with a lower interest rate, you most likely would save nothing in interest over the remaining life. Even refinancing to a new 10 year at a lower rate may or may not yield a benefit, it would depend on the initial rate and new rate. Only a detailed analysis of your current mortgage and future goals can determine when is the best time to refinance; but for someone to say the year does not matter, is absolutely untrue.
1 vote
Don Groff, Agent, Austin, TX
Wed Jun 22, 2011
BEST ANSWER
The best time to refinance is when you can lock in a lower rate without a lot of fees. If your mortgage is new you probably already have a good rate. If it is older you may not. Right now my broker rates are in the very low 4% range. You can refinance as low as 4.5% with zero closing costs depending on our credit and the size of the loan.

The best thing to do is see what the refinance would cost you and how long it takes to recoup the costs. It does not matter what year because that is not a factor at all... what matters is the current interest rates compared to your current loan. How long to break even is what you should be looking at.

Best of luck to you,

Don Groff
REALTOR | Mortgage Broker | Consultant
Keller Williams Realty | 360 Lending Group
o.512.669.5599 m.512.633.4157
listings@dongroff.com
2 votes
Dallas Texas, Agent, Dallas, TN
Wed Jun 22, 2011
Why refinance it costs you approx. $5K - or + spend that money paying off your mortgage

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes
Gregorio Den…, , San Diego, CA
Wed Jun 22, 2011
From a purely mathematical standpoint, the best time to refinance is before you make your first payment.; so year 1. Obviously, you save the most having all payments at the lowest interest rate possible. But, since we know that is ridiculous, refinancing as early in the amortization schedule as possible and as allowed by rate trends has the greatest effect on savings.

Note that refinancing to a lower rate does not always save you money, especially in later years.
Web Reference:  http://WeFixRates.Com
0 votes
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