Advisors used to say interest rates should drop by 2 percent before homeowners consider refinancing a mortgage. But with a large mortgage, just 1 percent is fine.
On a $300,000 30-year fixed rate loan at 7.25 percent, the monthly payment would be $2,046.53. At 6.25 percent, it would be $1,847.15, a reduction of about $200 per month.
Closing costs can be significant, from 2 to 5 percent. So you'll want to see when you break even.
Rick Good spent ten years in the newspaper business, including with The News & Observer (Raleigh, NC) and The Greenville News (Greenville, SC). He co-wrote, with Melinda Coleman, Rutledge to Riley: Governors of South Carolina, 1776–Present (Published by The Greenville News), and is the author of Mind Games Trivia #1 (Amazon). He has recently spent 15 years creating original trivia content through Sounds Good Mobile Entertainment and continues that with his new company, SGME Software. He edits The Smart Reader’s money, real estate, and business coverage.
