The old rule of thumb said that if current rates were more than two percent below existing mortgage rates, refinancing might make sense. But today's homeowners refinance for a variety of reasons. Homeowners refinance from fixed rates to adjustable rates, or from adjustable rates to fixed rates, to take cash out of the property's equity, or simply to reduce the payments. You should contact your Seaport Mortgage loan officer if you are interested in refinancing to determine if it may be best for you.

Refinancing is basically paying off your existing mortgage with a new one. You apply just as you did the first time, and there are usually fees and closing costs.

Call Seaport Mortgage to find out what fees are involved. Then, determine if you can recover these costs over time. First, find the monthly and annual savings expected using a mortgage payment schedule. Seaport Mortgage can provide a schedule or calculate the payment for you. Divide the cost to refinance by the annual savings to find the length of time needed to recover your costs.

For example, if the cost is $1,500 and your monthly savings is $50 ($600 per year), it would take 2-1/2 years to recover those costs. If you expect to move or sell your home within the next few years, refinancing may not pay.

If your loan is an adjustable rate mortgage, the decision is more complicated. Even the best economist can't determine with certainty what your future rates and payments will be. Refinancing to a fixed rate will provide the security of knowing that your principal and interest payment will be set in the future.

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