"The general rule is to wait until the rate is about 2% lower than your current mortgage interest rate," says Denise Supplee, a realtor with Long & Foster in Doylestown, PA. She warns that many people fail to consider the costs associated with refinancing, such as application fees, loan origination, appraisal fees, title insurance, and recording fees.
"Consumer debt has skyrocketed over the last three to four years due to inflation, and many have turned to credit cards to pay for groceries, gas, and everyday items that are needed to run a household," says Ron Meyers, president of Ron Buys Florida Houses in Wellington, FL. Americans currently hold $1.14 trillion in credit card debt, and with interest rates hovering around 25%, refinancing-even if it's for a slightly higher interest-rate mortgage-seems like a good deal.
"Depending on the rate, if one needs additional funds, looking to do a cash-out refinancing may be a better option than using credit cards or a high-interest personal loan," says Supplee. This is probably to No. 1 reason people refinanced this year, as rising property values have made this possible.
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