When I should refinance?
Depending on your loan balance, it is time to consider refinancing when you can save ¾ to 1% on your interest rate, often even less with a jumbo or a no closing cost loan. If you are paying closing costs when you refinance, this must be factored into the decision on whether to do so or not. As a rule of thumb, if you can save enough in your monthly payment to recoup the closing costs within 2 – 3 years, it is worthwhile to refinance.
Also, a refinance should be considered if you want to convert an ARM to a fixed rate loan, or if you want to take cash out for remodeling, or other personal needs..