With interest rates below 3% it may be a great time to consider refinancing. Even if you got your mortgage in the last year or two, it could be worth exploring. There are a few items to consider in addition to simply locking in the lowest interest rate:

1. How long you plan on owning the home: If you are planning on moving in the next few years, the amount you will save on monthly payments may not be able to offset the amount you will pay in closing costs for your new mortgage. Closing costs to refinance are typically between 2-5% of the loan amount, so it is important to calculate the breakeven point. If you sell the home before you reach the breakeven point, you will lose money on the refinance.
2. Potentially reducing the term: It is not all about a lower payment. If you can refinance to a mortgage that will be paid in full sooner than your current loan, you may want to consider refinancing. Often, a slightly higher monthly payment with a reduced term can save you a substantial amount of money by reducing the amount of time the interest can compound.
3. Switch from a variable rate to a fixed rate: You may already have a low rate if you have a variable rate loan, but in the future that rate may move higher. Current low rates on fixed mortgages may make this a great opportunity to lock in an historically low rate that will not fluctuate over the life of the loan.
4. You are currently paying PMI: If you did not put enough down when you purchased your home, you may be paying private mortgage insurance or PMI. Many homes have seen a significant increase in value this year, so you may now have enough equity to get rid of your PMI. Refinancing is not the only way to achieve this, but you may be able to score a lower rate and get rid of your PMI at the same time.

We are happy to look at your specific situation and help decide if refinancing might be the right decision for you.  Give us a call!