$370 per month is the average savings of my refinance customers in the past six months (average loan amount is $264,387). I was actually sort of surprised by the savings when I started collecting the data. That's really a lot of money to put in your pocket every month. The biggest winner had a savings of $672 on a loan amount of $243,800, that's just huge! Even the smallest loan at $112,000 saved big at $374 per month!
What would you do with $370 each month? That's a lot dinners out, lift tickets, movie nights, etc or you could start saving for the next vacation. But a really great idea is to improve your financial situation by investing, saving, or if you have short term debt, get rid of it. We were able to increase our 401K contributions last year after our refinance.
If you haven't refinanced lately, you should talk to your mortgage specialist (or me). The savings for my customers occurred across the board among all the loan programs: FHA, Conventional, HARP, VA, etc. Also, there are always new programs emerging. If I can't help you today, I keep track of your needs and call you back when I can. So it's worth a ten minute conversation to see if a refinance is right for you.
Figuring out if it makes sense for you is really up to you. But I like to walk my customers through a process of figuring out if it makes sense. A big factor that you should consider in making the decision is how long you plan to stay in your home. One of the simplest ways to consider whether a loan makes sense is to divide the cost of the loan by the monthly savings to determine your "payback". Let's say your loan is going to cost $5,000 and you're going to save $250 per month. Dividing $5,000 by $250 gives you 20 months. That means it will take 20 months in your new loan to "pay back" the cost of the loan. If you're thinking about moving next year, this doesn't really make sense. You would be better off staying in your current loan, you would actually lose money if you sold your house in a year. But if Johnny is a Freshmen in high school and you want him to graduate before you make any changes, then by all means this makes sense, because 20 months into this loan you will start saving.
Most borrowers don't want to dig much deeper than the above. But for the interested borrowers, I love to dig deeper into the numbers and look at amortization schedules to make comparative analysis of current vs prospective loan.
Feel free to call me for your free mortgage consultation.
Susanne Schlador, NMLS 929383
Capital Mortgage, LLC, NMLS 382735
208-761-9775 or 208-854-7806
susanne@capitalmortgageboise.com
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