Question 1

How do I know if refinancing saves money?

Accepted Answer

Compare the interest saved from a lower rate against the closing costs. If savings exceed costs before you plan to move, refinancing can make sense.

Question 2

What is the break-even point?

Accepted Answer

The number of months for monthly savings to equal upfront costs: Break-even = Costs / Monthly_savings.

Question 3

Should I shorten the term?

Accepted Answer

Shorter terms raise payment but lower total interest a lot; choose the shortest term you can afford comfortably.

Question 4

Can I roll costs into the loan?

Accepted Answer

Yes, but it increases principal and slightly reduces the benefit; compare scenarios.

Question 5

Fixed vs ARM?

Accepted Answer

Fixed provides payment certainty; ARMs may start lower but can reset. Consider your time horizon and risk tolerance.

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