Question : What percent to refinance would be worth it?
My husband says we could maybe save money if we’d refinance our house. We currently pay 8% on our loan which is a fixed rate. Isn’t there closing costs involved when you refinance at a lower rate? Would it really be worth it?? Since we’d have to shell out money to do it? We’re not financial savvy. If anyone could please advise if this is a good or bad idea. Thank you in advance.
low cost refinance

Best answer:

Answer by Bob F
FHA loans can be had around 5% with credit scores above 620, and reasonable fees.

Your closing costs can be added to the loan amount if you choose, which is what most people do, and doesn’t affect your payment too much.

I suggest you get a free pre-approval, and you can look at your “break-even” period, which is the amount of months that it would take for the refi to essentially pay for itself.

If you plan to stay in the home for awhile it makes sense to at least look at refinancing. You should also consider your savings over the life of the loan. Again, with a free pre-approval you have no risk.

And, when refinancing, you have 3 days AFTER the closing to break the deal if you’re not comfortable (it’s called the “cooling-off period” or right of rescission).