Time to Refinance Your Mortgage?

With rates hovering around 5%, which is a 37 year low, it's time to look at where you are with your mortgage. If you have good credit you should be able to qualify easily. These rates are really nice. You need to see where you are in your mortgage. If you are a few years from paying it off then it doesn't usually make sense to refinance. But if you are more than probably 8 years away from paying it off then you should do the math. You should try to refinance your mortgage for a similar or shorter term than you have left on your present mortgage. For example, if you had a 30 year mortgage that you have been paying off for the last 10 years look for a 20 year mortgage or even a 15 year mortgage. If the rate is quite a bit lower than your current rate you might be able to go to 15 years and have basically the same mortgage. You'll pay it off 5 years earlier and save quite a bit in interest. A good place to start to determine if you should refinance is to use Bankrate's refinance calculator. It's the best one I've seen on the web.

I don't recommend adding any other loans to your mortgage unless they are house related. So, if you had a second mortgage or you got a home equity loan to increase the value of your home then I would roll that into your mortgage. I don't recommend adding your car loan or credit card debt to your mortgage. First of all, if you have been reading my blog you know I don't believe you should ever carry a balance on your credit card. You shouldn't add your car loan to your mortgage because you are just going to pay interest on your car for another 20 years instead of 3 or 4 years. That will add up to a lot of interest over the years. You should consider refinancing your car loan if you want to do something about your car. Now if you got yourself into a situation where you do have credit card debt or have other financial problems then you can consider adding it to your refinance amount but you can't, I repeat CAN'T, allow yourself to get back in debt on your credit cards in the future.