is it ok to refinance at low rates like they are know, if you might sell let say next year or just not bother

In Market Conditions - Asked by steven m. - Sep 24, 2009
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Answer(s)

Thomas M.
Broker/Agent
Upland, CA

To answer this question, you need to look at the true cost of the refi.. Add all the fees associated with the refi to the lower mortgage payments to compare to your current payment total for the same period. Also, you don't say how long you have had the current loan, but consider how much of your old and new payments are to the principle.

Sep 28, 2009
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Brian G.
Broker/Agent
Phoenix, AZ

You want to figure out how much you will save and to do that you will need a good faith estimate from the lender you will be using for the refinance. Lets say there are $2500.00 in costs for the refinance and your payments drop by $75 after you refinance, it would take you 33 months to recover the loan costs ($2500/$75). You also want to keep in mind that if you are currently on a 30-year fixed and you are several years into it you are paying a good portion of your payment towards your principal. If you get a new 30-year loan your payments will be mostly be interest payments (Excel has a great amortization schedule online if you would like to see the difference). The odds are that a refinance on a property that you only plan on owning for another year does not make financial sense. Brian Gaffney, SJ Fowler Real Estate Inc., Investinphoenix@gmail.com

Sep 29, 2009
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Stephen F.
Lender/Mortgage Broker
Maple Shade, NJ

I would typically say NO! But if you are getting a great deal to drop your rate and it isn't costing you more than your savings when multiplying it out over the term you will be in the building then go for it. Remember most commercial loans have a prepayment penalty and you may be paying through the nose to get out of the loan in a couple years. There may even be a lockout period, SBA loans currently do not have any upfront fees so if you qualify that might be the way to go. But do your calculations first or have a loan officer do them for you.

Dec 4, 2009
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