Should I refinance and should I continue to pay the curtailment?

jacran1 · Joined: 15 Sep 2008 Posts: 1 1.31 Dollars($)

I am thinking about refinacing. I have a 30 yr. fixed rate of 6 1/4%. I am in my 2nd year and was informed that I can get a rate of 5 1/4% for 20 years. I do not plan on staying in this home for more than 3 to 4 years. Is it worth my while to refi? I am also paying an additonal 50.00 per month curtailment on this loan and was told that by doing so I can cut the length of the term. Was is your idea regarding both of my questions?

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.03 Dollars($)

Hi jacran1,

I keep up with the rates of over 80 national lenders and banks and I can tell you that there is not one out there that can deliver 5.25% right now without paying points. 1 point is equal to one percent of the loan amount and there can be up to 3 points charged to bring the rate down. I can't say how much they are charging you but there are definately going to be at least one point, plus lender fees, and title fees. If you plan on only being in this home for 3 to 4 years, the answer is no, it does not make sense to refinance. You will not make up for the cost of the refinance within this time period.

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