Should you refinance or not?

* Common wisdom on mortgages is that refinancing is only worth it if thenew rate is two points lower than your current rate. In other words,interest rates are lower than orginal mortgage, therefore refinancing will lower monthly payments.

* It is worth refinancing if your property has increased in value, increasing your equity in the house. You decide you can use this additional equity so you refinance and take cash out.

* You have a 30-year mortgage and you want to shorten the life of your mortgage and thus reduce your interest expense over the life of the loan.You refinance from a 30-year mortgage into a 15-year mortgage.

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* You should only refinance if you are going to stay in the house long enough to be able to amortize the cost of the refinance and still save money over the old rate. You should make sure that you are getting marketrates and that you are dealing with a reputable lender. Make sure to ask for total cost of refinance and out-of-pocket expenses, etc.