When should I refinance - guidelines and formula
Channel: Paul Miller
Date: 2020-05-19

As a loan officer for over 20 years, one of the biggest questions I get is when should I refinance. Here are a couple of guidelines I have accumulated over the past 2 decades:
1. If you can lower your rate by .5% it usually makes sense to refinance.
2. If you can get rid of mortgage insurance it usually makes sense to refinance
3. If you can cut 5 years off your mortgage and keep your payment the same it usually makes sense to refinance.
If you can do a combination of two of these it is a no brainer and you should refinance.
The next question I get is – Paul, is it worth it to refinance once you factor in the closing costs. Here is the math formula to help you make the decision:
Cost / monthly savings = freedom point
Here is what that looks like - If the costs for the loan is $3,000 and you save $300 per month your freedom point is 10 months. 3000/300 = 10
Now don’t worry. You don’t have to do the math or the evaluation, I have special software tools that will show you the freedom point as well as what your loan looks like in 5 years and 10 years. 
I have been a loan officer for over 20 years, I have wholesale rates and I am licensed in Utah, CA, ID, and FL. 
Now that you know the guidelines and the formula, reach out to me so I can customize your options, and together we can make data-driven decisions to decide if refinancing is right for you.