Jim and Amy are one couple who have lived in their house for about eight years now. They also have two sons, both of whom are studying in grade school. Jim as well as Amy, both have jobs. However they are afraid that the amount that they are saving is not sufficient for their sons’ college education. But just recently one of Jim’s co workers suggested that Jim could opt for refinancing his mortgage in order to get a much lower interest rate which would then proceed to decrease the amount that they paid every month, allowing them to save a greater amount every month.

What Are Their Financial Objectives?

Jim and Amy make it a point that their monthly payments are bang on time and also that they are never behind any of their other bills. Their Certified Mortgage Planning Specialist also explained it to them that if they opted for a refinancing at present, the it would be really good as the rates are, at present, at historical lows, and this might really decrease their monthly mortgage payment that they have to pay. They proceeded to conclude that this way would have a greater amount of cash left with them each and every month which would actually mean that they could then save a larger amount of money for their sons’ college education.

Things That They Should Consider When They Are Deciding On a Mortgage Refinancing

Should Jim and Amy opt to roll their loan costs into their loan balance or opt to pay cash or else opt to pay a higher rate of interest which then pays for their loan costs? They certainly do not wish to opt for a mortgage payoff which will result in them holding a new mortgage which would then end up costing a lot more in the long run.

Another thing that needs to be taken into consideration is whether they intend to sell off the house anytime in the near future. If so, then they would want to avoid paying points as well as fees at the closing. If they accept the higher rate of interest, then they might actually end up paying less every month till the time they do end up selling their house.