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2 percent rule when refinancing

I've always heard about the 2% rule when refinancing, is it important? by berrytmax2_718_413 from Santa Fe, New Mexico. Aug 17th 2011 Reply

Brian Bagon (bbagon)
#3 ranked lender in New Mexico - 4 contributions

There is really no such thing as a 2% rule, or 1% rule. It really depends on what you are looking to do. If you are looking to refinance on a 30 year term, how much money do you want to save a month on payment? How long will it take you to recoop your costs? Would it be more beneficial to refinance on a 15 year term instead and have your mortgage paid off sooner? More than likely you will save thousands of dollars doing this. It is also important to think about how long you think you will be in your house. If you are going to be there for 2 years, it may not be benificial to refi, but if you are going to be there for the rest of your life, it probably will be worth it.

Aug 17th 2011
Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,908 contributions

The first rule is that there are no rules. You should refinance if it makes sense for you. Many people still think the "Rule Of Thumb" is that that if you could lower your interest rate by 2% or more then you should refinance; Depending on your situation, it may make sense for you to refinance even if you can lower your rate by only 1/2%.

Aug 18th 2011
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