Lets sum this Q & A up: An owner of a new condo wants to know if it is to soon to refinance her mortgage. I say it is never too soon to refinance a mortgage as long as you know how much it will cost you, and when you will recoup your money.

Q: Last April I bought a new condo. Currently, my home mortgage has a rate of 8%. I see mortgage rates falling, and all are lower than mine. Should I refinance my mortgage? How long do I have to wait to refinance since I just bought less than a year ago? I do not want to miss out on these really good rates I see, and I want to do something about it but I do not know where to start. What do I do?

Answer: A refinance on a mortgage, no matter when you got it, can happen at any time you choose. Figure out how much the refinance will cost you, and how long it will take to make your money back and decide from there. If you are not able to recoup the closing and other associated refinance costs in 2 years or less, you should wait for rates to drop even further, or shop around at different lenders for better terms.

Think about how long you plan on staying at a home as well. If you know within 7 years or less you will not be living there anymore look into an adjustable rate mortgage which will have pretty good rates and terms over the first few years. You can also look into no cost refinance options, but these generally are not such a good deal. The closing costs are usually somehow worked into the new home loan and you pay interest on that for the length of the loan.
-M Petrone


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