I've been bombarded from different organizations trying to get me to refinance and wanted to see if there would be any advancement to doing so since interest rates have dropped so much.
My situation is this:
- Original 2018 loan was refinanced in 2019; I have a current loan balance of 206k on the "new loan", with an interest rate of 4% and monthly payments of 1450$; a quick home value estimate said about 260k for similiar homes in my area.
- We will probably be selling within 5 years and getting another house in the area
- I would like to lower my monthly payment, but more importantly I want to have the best possible equity in the house come selling time to make the next mortgage easier, and I'm not sure how a refi effects that.
- I have had no problems making the payments on either the old or new loan, though money is intermittently tight so I wouldn't want to drop more than a few k on closing costs.
I've tried a few refi calculators and done some search; most refi calculators indicate a "break even point" on a refi would be a few years from now, so probably around or shortly before we would want to sell, so maybe not worth it?...and the general rule of thumb seems to be don't refi if you are going to sell soon because of the closing costs. But the housing market and interest rates are so unique right now that I'm not 100% I shouldn't refi, especially depending on how the refi is actually done.
With the 2019 refi I was able to defer some of my monthly payments and didn't end up paying anything in closing costs, which I would gladly do even if for a somewhat higher interest rate since I'm not looking for long term savings, just significant savings in the next couple years.
TL;DR question If I just want to pay less monthly and be better positioned to sell my house in 3-5 years, should I refi? If so, are there any specific things I need to do to maximize my returns?