Pros and cons of refinancing my house?

Jenniffer
i have a va loan and i have been getting a lot of junk mail asking me if i want to refinance my home. i have a fix rate of 5 1/2 and was offered 4 1/2. i really would like to know what i lose by doing this and what i gain by doing this. i have been in my home a little over a year. also did the gov. come out with some kind of plan to help home owners? that is what most of the junk mail i have received says.

Anastasia
depends on your contract... if you pay a penalty by switching financers... the one percent less might not matter... you have to calculate the savings in the one percent over your new locked in time ( period vs your penalty from the current bank if you move to a different financer.Sometimes this is a better deal and sometimes it is not... you just have to do that math. As well, the bank you deal with now might do more for you in the future, ie. car loans... vacation loan... the new bank may not offer you anything but mortgages... and when you go back to your old bank for a another loan they wont give you the lowest rate due to your moving your mortgage.. sometimes having a mortgage at a bank gives you bargain power for other loans... again, do the math... look at the advantages and it may or may not be advantageous. And those fliers dont give you bottom line, they dont tell you all the other stuff that is hidden, it could very well end up more in the end... talk to them in person...and ask them if they are willing to pay your penalty for leaving your current bank... some banks will do that for you to switch.Good luck

Ophelia
There are a variety of factors involved in this.Any refinance will cost you thousands of dollars. I am certain that this junk mail says the refinance will not cost you any money out of pocket, which is probably true, but the finance company will roll the costs into your loan, so you still pay for it.This may pencil if you plan to stay long term.If you did a 100% VA loan, it is possible that you cannot refinance if your house value has reduced. I don't know what you are asking about for a government program to help home owners. Obama has plans, but he obviously has not implemented them yet. Bottom line on the refinance, if you are getting junk mail about this, someone is trying to make money off you, not help with your situation.

Ada
As a general rule of thumb, if you intend on staying in your house for more than 5 years, and you can lower your interest rate by at least 1%, its worth refinancing. Look at the closing costs for the new loan. That is the amount of money you have to save in interest to break even. Remember when you compute interest savings, don't just look at the monthly payment, look at how much less interest you are paying. Remember that when you refinance you start your loan over. That means if you are 5 years into a loan with 25 years remaining, and you get a new 30 year loan, you are stretching the 25 years worth of remaining payments into a 30 year loan, which obviously reduces your payments and can even increase the amount of interest you end up paying. Many people over-look this and just look at the monthly payment which is not a mathematically correct way of comparing the savings.

Darnell
you have no equity in this home after 1 year. they are trying to streamline this note but you will bring cash to close as most with VA did 100% loans