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Now

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here is where I start "preaching" - If borrowers are refinancing in order to reduce payments and use the extra money to buy cars
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or "toys", then I have real heartburn. OK, this is one of my favorite questions. Just When Should I Refinance My Home. Most calculations will show that the costs to refinance are not recovered until about 4 years of reduced interest
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rate payments. I see many instances where the income of a home owner changes so drastically that lowering the monthly payments becomes an immediate necessity.
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The mental security of a "paid off" home is not to be underestimated. A good example of this is to refinance into a 15 year fixed rate loan, during a time when interest rates have fallen.

Just remember - loans are not free -

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people get
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paid from somewhere. Our homes are not a source of funds for us to siphon off - they are where we live, where we raise our families,
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and where we can feel safe and secure. That usually means break even is about 4 year down the road from the refinance.
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All situations are different, but on
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average you will need to achieve at least a 1% point reduction in order to have things make sense. Refinancing a home is a serious decision, not to be taken lightly or often. The
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reason I like it so much is that it gives me a dmitri to "preach" about the way the world should work (according to Bob), at least about how property ownership should work. The security and the peace of mind
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are awesome.

Fees are also incurred with the title change, re-recording of the trust deed, escrow fees, notary fees, and other fees that I have left out. More commonly

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though, the move from a 30 year term to a 15 year term, is just not palatable. If conditions require it, then a refinance may be in order.
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In this edgard the refinancing may be more of a monthly cash flow move than a loan term adjustment. Our goal should be to get the home paid off, and refinancing can both help
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and hinder this process. As interest rates decline there is real incentive to change the loan to capture the new and lower rates (thereby saving monthly payment costs). A refinance is not free, it may be presented as free or no cost by some, but in reality the costs are either upfront or are buried in longer terms or increasing the balance on the loan.

What a great plan if you can do it.

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If you are coming from a 30 year loan this will increase the monthly payment (ma not your immediate goal) but "wow" the end goal of a paid off loan will really be advanced. In my opinion the best and most valid reason for refinancing a home loan is to reduce the total interest paid and shorten the time of the loan.