Should you refinance your home?

Are you thinking of refinancing your house?  What's holding you back?  Its seems like a great time to take advantage of all-time low rates caused by a recession like economy and take the plunge.  But you need to do your research before contacting your lender.   Before you refinance your house there are several things to consider. 

First thing to consider is whether you plan to stay in your house or move.  With refinacing you typically have closing costs- so figure your break even point.  We had considered moving with all the great deals to be had with foreclosures and the slow economy.  After about a year of watching and waiting we decided to stay put and save thousands of dollars.  

Once you decide to refinance- shop around.  We went to and submitted our information to find some creditors interested in helping us.  It was great because lenders contacted us with their best offers.  This will give you an idea what is available as far as rates and offers.   Typically there are 3 ways that lenders will handle your closing costs.  

  1. They will let you know your closing costs and you will need to bring a check to cover the costs.
  2. They will let you roll your closing costs into the amount that you are borrowing.
  3. Some will offer lower or no closing costs but your interest rate will be bit higher.

So which option should you choose?  This will be up to you and your budget.  Don't be afraid to ask questions at this point.

Check out any of these lenders or search for your own deals.

Popular Search - Refinance, Mortgage

Lastly have the bank or lending institution lock in your rate in writing and when it expires. Rates change daily so get your options in writing.  Good lenders will send you a proposal in writing by fax or email. Ask for at least 60 days and get commitment from them that they can actually close before the rate expires.  

We are on our 2nd round of refinancing.  We initially started out on a FHA loan at 7% when we purchased our home.  Then we refinanced at 5.65% within a few years with our house appraising enough to drop our private mortgage insurance (PMI).  Recently we refinanced with a low rate of 3.25% with a 15 year loan.  We are saving 7 years of house payments with a slight increase in our payment.  Saving us over $45,000. That is a lot of dough! has a great calculator! 



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