Should I refinance my mortgage?

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“Should I refinance my mortgage?”  This is certainly one of the most popular questions of 2008 . . . maybe 2nd or 3rd only to “Do you think rates will go lower?” and “Who do you think the Democrats will choose, Obama or Hillary?”  Well, I don’t have the answer to questions 2 and 3 (speculatively, I would say — not that much lower and Obama), but I do have the answer to the first question.  Should you refinance your mortgage?  Yes.  Yes, you should refinance your mortgage.

Seems simple enough, right?  Well, actually, the follow up question to “Should I refinance my mortgage” is the key to the whole thing — “When should I refinance my mortgage?”  The answer: you should refinance your mortgage once the cost of the refinance can be reasonably expected to be recouped over time by the amount of monthly savings based on how long you are planning to stay in your current house (or at least keep your mortgage).  You see where this is going . . . more questions.  “Well, what is the cost of doing a refinance?”  and “How long are you going to stay in your current home?”  “And if it is a good idea for me to refinance now, but there is a chance that rates will go lower, then maybe I should wait???”

Bottom line — because mortgage rates change daily (and in the past few months, they have been changing mid-day as well), and because closing costs and interest rates differ based on your loan amount, your loan-to-value (how much un-mortgaged equity you have in the house), your credit score and a handful of other factors, when to refinance your mortgage is a combination of knowing when it makes sense to refinance (at what rate) and knowing when it’s time to refinance (based on market conditions).

On January 15th, mortgage rates dropped — down to 5.25% or even 5.125% for a 30 year fixed rate loan — only to jump up by 0.5% or more by the end of the day.  Because of the quick move in the market, many consumers (while trying to figure out the “best deal”) missed out on the best mortgage rates in years.  To prevent this from happening to you (or from happening to you again, or from this happening to us, if you are one of my clients) you need to know two things.  1.  At what rate should you consider refinancing your mortgage.  And 2. When that rate is available.

Introducing . . .

myRateTrack.com is a new service that allows consumers to manage their refinance options with the expert advice of their mortgage professional.  The system includes RateTrack refinance reports (a refinance report specific to your loan), and it allows consumers to set a target refinance rate.  When the target refinance rate is availble, both the mortgage professional and the client are notified that it’s time to refinance (or at least quickly consider the option).

If you are a client of mine, then hopefully you received an email with information about how to access the myRateTrack.com system absolutely FREE.  If you are not a client of mine, but are interested in the service, tell your mortgage professional to get you signed up (for FREE)!!  And then you’ll know for sure — 1.  At what rate you should consider refinancing your mortgage (it’s about a 10 minute conversation with your mortgage consultant) and 2. When that target rate is available.

And then the question of the year won’t be “Should I refinance my mortgage?” but “Have you heard about myRateTrack.com??”

Jeffrey Pinkerton is a Mortgage Consultant and President of Hillside Lending, LLC and writer for “the Mortgage Blog.”  Hillside Lending seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing.  For more information about available programs and interest rates, please visit www.hillsidelending.com. 

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