Should I Refi?

[Lance H.]

Hey Everyone,

Debating whether I should refi my primary residence again or not. I am not looking to take money out or anything and the current payment is easily affordable for me, I just don't like paying more to the bank than I have to!

I was at 6.75% until Sept 09 when I refi'd down to 5.25%. The new loan would be for around 161k. I can now get 4% paying 0.5% origination and no discount points. I am only planning to live in the home another 1-2 yrs, but I'm underwater (va loan so refi still possible) so I plan to rent it out when I move. It's not good as a rental, will go for ~1050/month so I'm thinking with this refi it would be $100 less I need to come out of pocket for each month.

Sorry for the long post, advice is appreciated!

Lance

[J Scott]

You'll end up paying about $2K in closing costs on the new loan ($800 in origination, $1000 or so in title/attorney/registration fees, and then potentially an appraisal).

If you'll be saving $100/month, you recoup the $2K outlay in about 20 months. Though given the time value of money (it's worth more today than tomorrow), it's probably closer to 24 months.

So, do you plan to live there for another 24 months? If yes, do the refi. If no, pass on the refi.

Just my $.02...