How to Determine if you should Refinance?

Traditionally, the decision on whether or not to refinance has meant balancing the savings of a lower monthly payment against the costs of refinancing. But in recent years, lenders have introduced "no cost" and low-cost refinancing packages that minimize or completely eliminate the out-of-pocket expenses of refinancing. (These refinancing packages compensate with a higher interest rate, or by including some of the costs in the amount that is financed.)

If paying closing costs use the refinance calculator to determine your break even point

The No Closing Cost Loan:
With traditional refinancing, the most often cited rule-of-thumb is that the interest rate for your new mortgage must be about 1 percentage point below the rate of your current mortgage for refinancing to make sense. However, with the newer low- and no-cost refinancing programs, it can be worth your while to refinance to obtain a smaller reduction in interest rates.

Figuring out your Break even point
How long you expect to stay in your home is also a factor to consider. If you'll be moving in a few years, the month-to-month savings may never add up to the costs that are involved in a refinancing. To be able to decide whether it is worth it to refinance, consider how long it will take you to make back the money you spent on closing costs. use the following formula to figure it out :

(Current Payment - New payment= Monthly savings). (Closing costs/Monthly savings)= number of months to break even. When you know how many months it takes you to break even you can make an intelligent decision about whether refinancing makes sense for you.

These helpful tools may assist you in deciding whether you should refinance:

Break-Even Refinance Calculator

Monthly Payment Calculator

Closing Cost Page

Shoreline Mortgage Corporation
4000 Hollywood Boulevard
Holllywood, FL 33021
Toll Free (888) 353-1558
Phone (954) 966-1313
   Fax (954) 966-3606
E-Mail  Loans@Shorelinemtg.com

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