Does A Baltimore Refinance Make Sense For You? tagged: , , , ,

Does A Baltimore Refinance Make Sense For You?

Posted by in Personal Finances

Does it make sense for you to refinance your Baltimore mortgage right now?  The truth is, Baltimore mortgage rates are at, or near, all time historic lows.  Assuming all your financials are in order such as your good credit rating, a steady income, and decent equity in your home, it should be an absolute no brainer to refinance today, right?  Not necessarily.  As are so many things in life… it depends.

It depends on how long you think you’ll remain in your current home (or to be more precise, how long you plan to keep the mortgage.  But considering how low rates are right now, this will probably be the last time you’ll want to refinance this particular loan).  What you need to understand and calculate for yourself is how much a new mortgage will cost you and how much money you’ll save every month with a new, lower rate.  Once you have those 2 numbers, simply divide the cost of the mortgage by your monthly savings to find your ‘break-even point’ in months.   If the loan cost you $3,000 and you were going to save $300 per month, 3000/300=10.  So in 10 months your savings will have paid off the expense of getting a new loan.  As long as you remain in that house for more than 10 months, you made a good financial move.  If you’re not sure you’ll be there as long as your calculations work out to, you might be better off keeping your cash in your pocket.