If is wise to refinance your house if you are looking to sell it in 2 years?

Answer 1

Maybe, maybe not. Please ignore ANYONE who gives you a pat yes or no answer! Every re-fi transaction is unique and you MUST evaluate it in its entirety to make the best decision!

You have to compare the cost of refinancing (closing costs for the most part) vs the total savings in monthly payments over that period of time. If it's going to cost you $4,000.00 to save $150.00 a month over the next two years (total savings of $3,600.00) then it would be a terrible idea.

On the other hand, if you can get a reduced fee closing in exchange for a slightly higher interest rate that still saves you money each month then it may be a great way to go. I refinanced 3 years ago with a flat $395.00 fee loan from a popular national lender at about 1/2% above the going rate at the time that still saved me over 400.00 a month since I no longer had to pay PMI. My total closing costs were actually less than my old mortgage payments were (remember, you get to skip a month when you refinance unless you close exactly on the last day of the month) so the entire transaction was a winner from the get-go.

Shop around for a re-fi that will save you money. They're out there, you just need to keep your eyes open and evaluate EVERY offer to see if it's a good deal for YOU.

Answer 2

No, it isn't. I've watched a few financial shows and they recommend to refinance if you plan on staying in the house at least 5 years or more. The only way I would say it would be wise to refinance for under 2 is if there is a huge difference of more than 5% in the interest rate.

Answer 3

Depends... why do you need to refinance?

If you just bought your place and using adjustable mortgage, there is a good chance that you will be forced to pay higher interests 2 years later when loan resets.

Of course, realtors told you that you can sell the house and walk away with big $$, but what if housing market is in the middle of correction?

http://money.cnn.com/2006/09/08/real_estate/caught_in_the_bubble/index.htm?postversion=2006090814
http://money.cnn.com/2006/09/05/real_estate/Ofheo_home_prices/index.htm?postversion=2006090514

Scary thing is that, high interests means lower home value. Both are bad and certainly really bad that they usually show up together.

30 year fix is actually near all time low, about 6.75%. Try it. :)

Answer 4

Unwise. It is unlikely that in 2 years you will save so much from the lower interest rate to make up for the closing costs you will pay at settlement for the refinance expenses.

Check your current rate versus the new rate and do the math to see what the savings would be. I'm guessing your closing closts for the refinance will be around $4,000

Answer 5

No. You wouldn't be able to recapture your out of pocket costs, like points, legal fees etc. with the savings you'd realize with a lower interest rate on the new mortgage.

Answer 6

Nope

look at Suze Orman site for financial info

Answer 7

if you take out a line of credit you can cash out what you need without closing costs.