Real Estate Tips from Bob Rich-Should You Refinance?

The rule of thumb says that if your present mortgage is 2 or more points higher than current rates, refinancing should work to your advantage. In utilizing any rule of thumb, it is important to remember that is only a guideline and may not be applicable in all circumstances.
You see, the downside of refinancing involved up-front costs, such as: prepayment penalty (if your present mortgage includes this clause), application fees, appraisal fees, legal fees, other recording fees and points. Each point is equal to 1% of the mortgage commitment. For example, 1 point on a $140,000 mortgage would be $1,400.
If you're planning to remain in you present home for the long term and expect to be paying on your mortgage for many years, the costs of refinancing may be well worth the expense and save you thousands of dollars in interest expenses. However, if you pay the up-front expenses and relocate in a short period of time, refinancing may not be the prudent course for you.
Bob Rich, President and Founder of the The Rich Company, has answers to your real estate questions.