Is it time to refinance? Maybe so, maybe not.

The economy is tough right now, but mortgage interest rates are at historic lows, so naturally, many of us with mortgages are thinking . . . "Hey, I could sure use a little extra cash every month . . . maybe I should refinance the house."

Is this the right move for you? Well, it really depends on several things:

• Your current interest rate
• Your current loan balance
• The type of loan your currently have (fixed, adjustable rate, etc)
• The length of time you plan on staying in your current home
• Your current borrowing qualifications (like your credit score and income to debt ratio)

Here are some thoughts:

• Typically the cost to refinance a loan is 2.5%-3% of the loan amount. This cost can usually be financed into the loan, so you don't necessarily need to have that money up front. However, you typically want to make sure that the difference in your monthly payment will recoup the refi costs within 24-30 months . . . AND you need to make sure that you are going to stay in your home at least that long. If the costs to refi will take longer to recoup . . . it might still be something you want to consider IF you plan on staying in your home for a long time.
• Generally speaking, if your loan balance is less than $250,000, then you may need to see at least a 2% rate drop for it to make sense for you to refinance.
• If you currently have an ARM (adjustable rate mortgage) and you are past any "pre-payment penalty" time period, you definitely want to consider refinancing, no matter how much it will save you each month. This is because your rate is not stable and when the market picks up (and it will) there is no telling where your rate may go.

I hope that this information has been helpful to you. If you would simply like to ask questions about refinancing, or check rates, please give Norma Owings with Magna Bank a call at 901-301-4914 . . . or e-mail her at Norma.Owings@MagnaBank.com. She helped me put together this information for you and would love to help you if she can . . . and she is a lot like me . . . helpful, without being pushy (that's how I think I am anyway . . . hope you do too!! LOL).

As always, contact me any time you have any type of real estate need or question . . . AND remember I live off of REFERRALS, so if you can think of ANYONE to whom I could be of service, I would love it if you would give me a shout.

Thanks!!

Your Realtor,

Tracy

Tracy Kirkley

Crye-Leike Realtors

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