Refinancing Your Home Mortgage

Wealth Advisor

In this video, the focus is on analyzing the right time to refinance a mortgage. The key considerations include the duration of your stay in the house; if it’s under three years, refinancing may not outweigh closing costs, but beyond three years, it could make sense. Additionally, the video emphasizes assessing the opportunity cost of investing the money elsewhere. An example showcases potential savings through refinancing. It advises viewers to consult their banker for quotes on interest rates, monthly payments, and closing costs, and to reach out for a personalized break-even analysis.

Video Transcript

In this video, we’re going to analyze when it would make sense to refinance your mortgage. Many clients have been asking us if they should refinance their mortgages right now as interest rates are starting to drop to historic lows. A couple of key factors that we would want to look at and help analyze is number one, what is the time period for staying in the house?

If it is under three years, generally the interest being saved will not outweigh the closing cost. If it’s beyond three years, it might make sense. The second thing we want to look at is what is the opportunity cost if you were to take that money and invest it somewhere else.

An example of a client that we had recently had a $500 ,000 mortgage interest rates were in the mid -threes and we helped them refinance from a 30 -year to a 15 -year fixed rate down to about 2 .5 percent and monthly payments went up slightly but that saved about $200 ,000 of interest payments knocking off 15 years.

So this is obviously what we would want to help analyze this on a case -by -case basis. We would recommend reaching out to your banker and getting quotes on what interest rate would be, what monthly payment would be, and what the closing costs would be and then reaching out to us and we could help perform a break -even analysis and we’re super excited to be part of this decision.

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