The
rule widely published years ago was to only refinance if
you could lower your mortgage interest rate by at least
two percentage points. This general rule of thumb was a
simple way to analyze the refinance, allowing consumers
to consider the rough costs of refinancing. That rule no
longer holds true in today's market, because you can refinance
your martgage with no closing costs or points.
When
a refinance costs you nothing, any savings in the rate is
pure gravy. "No-Closing Cost" refinances are just
one of the "2% rule" breakers. We'll discuss these
and other reasons to consider refinancing in this article.
Here
are some of the most popular reasons to refinance:
- Lower your monthly mortgage payment to improve cast
flow.
- Switch from an Adjustable Rate Mortgage (ARM) to a fixed
rate loan
- Switch from a fidxed rate loan to an Adjustable Rate
Mortgage (ARM)
- Free up tax-deductible cash
- Eliminate Mortgage Insurance (MI)
