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Updated over 4 years ago, 07/11/2020
Refinance makes sense now? If Planning to sell in two years
I will most probably sell in 2 - 5 yrs does Refinancing makes sense now?
Thanks
It takes on average 7 years to break even on a refinance. Unless your current rate is very high it doesn't make sense or unless you need the cash out.
2 years no, 5 years yes
- Russell Brazil
- [email protected]
- (301) 893-4635
- Podcast Guest on Show #192
All depends on current rate. I have clients that purchased less than a year ago and were dropping their rate from 3.875% to 2.8% with no buydown. The break even point is less than 2yrs with that big of a drop.
Also, you can look at a refinance as an equity advance. With 2 months no mortgage payment, and If you have impound account with old lender, that can equate to sizable amount of cash back. For example, with $400k loan amount, you’d get close to $10k back...but you increase your loan amount for about the same amount, so it’s equity advance.