Deciding to Refinance

When your primary purpose for refinancing is to lower your interest rate and monthly payment, without taking additional cash out or reducing the term, a simple calculation can help you determine whether a refinance might work for you.

Simply divide the anticipated monthly payment savings by the amount of closing costs required for the new loan. This calculation will give you a close idea of the time needed to “break even.” Here’s an example:

Monthly Payment Savings:  $100
Closing Costs for Refinance:  $2,200
2,200 ÷ 100 = 22

You’ll need 22 months to break even on the closing cost paid with savings from the new, lower monthly mortgage payment.

In this example, you will actually begin to save money in month 23—and your savings will continue every month after that, for the life of your loan.  

As you can see, how long you expect to stay in your home is a very important factor to consider. If you believe you’ll likely move prior to your break-even point, it may not make sense for you to refinance.  

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To learn more about refinancing with APGFCU, call 888-LOAN-391 (888-562-6391) or complete this CONTACT US form to receive a call from an APGFCU Mortgage Consultant.