Should You Refinance?

The answer is that it all depends on your situation.  I know everyone has heard the saying that you should refinance when rates are 1% lower.  That isn’t always true, sometimes it is more and sometimes it is less.  The way to figure it out is by dividing the costs of the loan by the amount of monthly savings to see how long it will take to recover your money.  If you plan on staying in the home and/or keeping the loan for at least that long then it makes sense. 

If you have an ARM (adjustable rate mortgage) then you need to decide how long you are going to stay in the home and/or keep the loan.  If you are unsure then you may want to think heavily about refinancing since rates are at historic lows.  There is no sense on risking it.  Look how many people are in trouble right now because they took out an ARM.  The article below has some good advice for you too.

http://money.cnn.com/2009/10/20/real_estate/refinance_adjustable_mortgage.moneymag/index.htm?section=money_realestate