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To Refinance, or not to Refinance?

To Refinance, or not to Refinance?

posted in Mortgage News

In years prior, common reasons for refinancing a closed mortgage have ranged anywhere from debt consolidation purposes to renovating your house. However, with the recent economic conditions, another reason has been added to the endless list: low interest rates.

How do you know if a refinance will ultimately save you money?

There are a couple different factors in determining the financial validity of a refinance.

Current mortgage factors:

- Interest Rate
- Maturity Date (Years of term remaining)
- Payout Penalty contract (usually greater of either 3 months interest payments or interest rate differential calculation)
- Future/Potential mortgage factors:
- Interest Rate
- Term

Here's what one economist said about the topic, "To me, (refinancing) is pure mathematics. There is nothing probabilistic or speculative about breaking a mortgage....If a homeowner can refinance into a mortgage with an identical term that reduces monthly payments above and beyond any penalty costs, then go for it. Plain and simple..." York University Moshe Milevsky (FP)

If you would like me to take a look at your situation, give me a call at             403.802.7213      , I would love to talk to you! In this consultation, I will tell you mathematically whether or not a refinance will save or lose money based on computer-generated amortization schedules.


Mortgage News

15 dMar, 2012

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