Now’s a Good Time for Some Homeowners to Refinance

castleMortgage rates (30-year fixed) are at around 4.25% today, according to Bankrate.com. And what with rising home values in many parts of the U.S., a whole new crop of homeowners may find that they have, at last, sufficient equity to consider refinancing.

But that doesn’t mean everyone with a mortgage rate higher than 4.25% should rush out and refinance. The upfront costs of arranging for a new mortgage can sometimes wipe out the savings to be gained.

Yes, figuring out whether a refi is right for you is going to involve some math. How nice, then, that Consumer Reports‘ January, 2014 issue offers (in its Money section) a handy guideline for today’s mortgage market. Quoting Michael Garry, a financial planner in Newtown, PA, it says, “Refinancing might be worthwhile if you’re paying more than 5 percent.”

So if you’re paying less than 5 percent on your home loan, you can probably save yourself running some numbers. If you’re paying more, however, don’t worry that you’ll have to dig out your slide rule. Some simple online calculators can help you, as described in Nolo’s article, “Make Sure You Won’t Lose Money When Refinancing.”