Is Refinancing Your Mortgage Worth It?

Is Refinancing Your Mortgage Worth It?

Ramsey Solutions YouTube Channels (Subscribe Now!)

Did you miss the latest Ramsey Show episode? Don’t worry—we’ve got you covered! Get all the highlights you missed plus some of the best moments from the show. Watch debt-free screams, Dave Rants, guest interviews, and more!

Check out the show at 4pm EST Monday-Friday or anytime on demand. Dave Ramsey and his co-hosts talking about money, careers, relationships, and how they impact your life. Tune in to The Ramsey Show and experience one of the most popular talk radio shows in the country!

Ramsey Network (Subscribe Now!)

• The Ramsey Show (Highlights):

[JenniferBeeston]

This is all I talk about all day long with clients. It is so important to refinance ONLY when it makes sense. So many shady lenders talking people into loans with low rates but such high fees it doesn’t make sense at all. Always do the math to make sure it makes sense. Don’t get sold!

[KrystalToddCPA]

I like the callers aggressive approach in taking the 10 year option. The quicker you can get out of debt is the faster you can grow your investments and net worth.

[ThinkBlueAZ]

Didn’t even ask if he could afford the higher monthly payment without being house poor.

[ChicagoTRS]

So many people seem afraid of refinance fees. IF you can drop your interest rate by a percent or more and plan to stay in the house for more than two years most times you will recoup the refinance fees in interest savings in less than two years.

For many it is well worth refinancing...and not just throwing extra at your 30 yr loan. Look up 15 yr loan rates, how much will you drop your interest rate? If it is one percent or more drop do the math you should probably refinance.

[vcupiano]

My dad and mom payed off there beautiful home years ago. Fast forward, moms dead, dads just put a lien on the house which doesn’t need to be payed until he dies. Mom would be PISSED, as my father who’s beginning to lose it, is spending money like he’s just won the lottery or something.

[LGABC]

Couldn't you just make extra payments on your existing mortgage directly to principal and avoid the closing costs? We've been throwing an extra $1000/month at our 30-year mortgage and it should pay off in 9 years according to the mortgage calculator.

[jcrowley]

If you have no prepayment penalty, . Just pay extra. This effectively lowers your interest rate and there's no refi fees

[XaXiuHeo]

Should I refinance my current rate is 3.25% to 2.875% loan amount is $460k, closing cost is $9k with option impound which mean escrow will withhold 6 month homeowners insurance and 4 months properly tax?

[Andy-emxt]

30 year mortgages can be good too. The $600 dollar difference in monthly payments could have been invested earning 10% a year. It just depends on the level of risk you can and are willing to take.

[jeffreymurphy]

Eventually all of these gains will turn into losses. The only question is will you be able to leave the market at the right time?

[arcticrest]

Good to refinance if you get a lower rate!

[p]

I listened to your reasoning and it has the flaw that one can invest the difference in mortgage choices differently. It makes more sense to invest that cost savings of say $100 per month into an ETF such as PFF to capture the dividend rather than going with a 10-year mortgage to save on the monthly payment. Investing at 6% is better than saving an added half percent in rate. I would stay with the 30-year mortgage and just do a refi. Rates today are under 3%. And likely to go under 2.5% by year;s end. That is my opinion.

[logicalmrspock]

I have a similar situation to this caller and could use help with a decision...


Balance: $133, 150
Interest Rate: 4.375%
Original Term: 30 years
Current PMI per month: $153.80


Can refinance down to a 15-year 2.625% (1.750% savings)


However, total closing costs look like $9, 250 ($4320 loan costs + $4930 escrow/prepaids/etc)


The total closing costs has me a bit hesitant on if it's worth it, but I *HATE* paying ~$150 in PMI each month.

[rogeliogarcia]

Should I refinance my home? I have a 30 year mortgage and I wanna refinance from a 4.8% to a 3.25% interest? My payment will be cheaper by 60 dollars per month and my pmi will be gone but closing cost will be 7, 000 . Should I refinance? I would love your advice? Thank u.

[jonathanyugi]

I just refinanced 4 months ago frm a 3.675 to a 3.365% with the intention to drop the PMI! Now my question is should I refinance to a 2.5%. Or just stay where I’m at? Thank you in advance!

[tammmy]

I have a question we have a mortgage of 47000 with 6.35 interest. We are paying an extra 60 dollars a month. Pay off is about 13 years. Does it make sense to refi

[inertiazero]

does refinancing affect your property taxes? i bought my place 8 years ago for 350k and now it's worth 500k. The property tax is 2% of the home value. Does a refi re-access the property and thus change it to 2% of 500k?

[davidhodge]

If the caller is over 50, I agree with Dave’s advice. If he’s in his 20s or 30s he’ll have much more wealth in his later years by staying with a 30 year loan and investing the difference. 30 year olds have so much potential for insane compounding. Get as much money as possible into investments earning 10% ROI! The opportunity cost of putting extra money toward paying off a 3-4% mortgage is HUGE!

[samuelandraws]

I am just not following the math here, to be exact, on time stamp 1:05, how you came up with the $1, 670 saving for every 1% of interest savings, knowing that the closing cost for the refinance is $2, 900 as per the caller at time stamp 0:57 ?

[naana-scelyne]

Hi Dave,
Should I refinance with a loan of 282k and current interest rate 4.7? New loan will be 288k closing cost 6k and 3.2 interest rate . Bought the home over year ago.