When Should You Refinance???

hii there, i learnt a lot about refinance from your post eric. i used to think that in any situation one is able to refinance the loan. guess what??? i didn't knew about the 2 percent rule. thanks...

Hi guest,

The 2% rule is a way to judge whether refinancing will be profitable for the borrower or not. Moreover, it is always better to refinance if you are planning to stay in the same property for a longer period of time. To know more about 2% rule in refinancing, check out the following link:
http://www.mortgagefit.com/discuss/2percent-rule.html

Thanks.

That's right, the 2% rule was an old rule of thumb. You really need to judge each scenario independently. In some instances, it may make sense for someone to refinance even if they are going to improve the rate by 1% or less. It all depends upon your loan amount and how long you plan on owning the property. I am working with a few customers who are going to improve their financial situation by refinancing to a rate that is 1% lower.