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Are you paying refinancing costs each time you refinance? If so have you even recouped the costs you paid out in the past yet?
yeah, no haven't recouped just yet, probably pretty close though. I'm not that concerned about the old refis if i can save money over the next 20 years.
I would just keep the 4.25%, my rate is 6.00 %, I refinanced twice with a no cost refinance from 7.25% down to 6.5% and now 6.0%. My mortgage balance is so low it's not worth refinancing again.
Instead of saving interest by once again refinancing just add extra monthly payments to your principal each month. You'll save on interest, more so than if you went with a lower rate.
You said you broke even almost on the last refinance, did you recoup your savings on the first refinance? If not, you're looking at refinancing increasing debt or paying out of pocket closing costs at a loss.
If you do refinance, I suggest the following:
1) do not increase the term limit of your loan. If you're 3 years into a 30 year mortgage that means you have 27 years left, if you refinance for a new 30 year loan, you pissed away 3 years of mortgage payments. Go from your 30 year loan with 27 years left on it down to 20 for example. Bam, you saved 7 years of payments
2) do not increase the amount of principal you're refinancing. If you owe $285K and refinance say $290K to roll in the closing costs, your mortgage balance is going up not down. You want it to go down. Pay extra principal
3) Look at a no cost refinance. It works. You don't pay closing costs. The gotcha is you'll pay about .5% more in interest rates. Nobody rides for free. But if you can shave .5% off your interest rate you save on interest on your very first payment of the new loan, you don't have to pay for 2-3 or more years to break even and then start saving