Should I refinance?

That is a good question and the answer is that it depends.  I have had many clients call me and say they heard that if your rate doesn’t decrease by at least 1% it’s not worth it.  That is not true.  In order to find out if it is worth it we would have to compare what the rate reduction will save you per month, how much it will cost you in closing costs, and how long you plan to stay in the home or keep the loan.  I always calculate how many months it takes to recover your money from closing costs and if you plan on staying in your home longer than that, it would make sense.  There is a good article below that talks about whether to refinance or not.  The only part I don’t agree with 100% is the new rate being 1% lower than your current rate as I discussed above. 

http://money.cnn.com/2008/12/24/real_estate/when_to_refi/index.htm?postversion=2008122608