Is it worth it?

A general rule of thumb says that refinancing becomes worthwhile if one's current mortgage is at least 2% higher than the prevailing market rate. This figure is generally accepted as the safe margin when considering the cost of refinancing a mortgage as weighed against the savings.

Refinancing is a good idea for homeowners who want to:

• Get out of high interest rate loans to take advantage of today's lower rates (presuming they intend to stay in the home long enough to make the additional fees worthwhile).



• Draw on the built-up equity in their home to get cash out for a major purchase or for their children's education, or additional insurance protection for family, or to apply to be in a better retirement plan.



• Convert an adjustable rate mortgage (ARM) to a fixed rate loan, or convert to an ARM with a lower interests rate and/or other protection features.

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