Should I Re-Finance?

[mAndrew1980]

Currently I'm 3+ years into a 5-year ARM @ 4.5%. My loan balance is $189,900 and the value of my home is approximately $330K-$340K. Currently my TU FICO is 671 from too many high credit account balances - but over the next 3-4 months I should have at least three of them zero'ed. I expect my scores to rise above 700+ when those three accounts are paid off.

My wife is pregnant with our first child and we'll probably start looking for a new place in the next 2 years or so. Doesn't it usually cost like $5K to refinance a home loan? Doesn't seem like it would be worth it to re-fi, roll the closing costs in the mortgage, only to move in a couple of years?

[Anonymous]

Unless you'd be saving a significant amount of money each month over the next couple years (enough to offset the costs of the refi), it may not be worth it.

[StartingOver10]

Agree with dpeezy.

Also, some states are significantly less to refi in than other states. My daugher and her husband are in the middle of a refi right now which allows them to drop the PMI and drop the interest rate too.  They will recapture their total closing costs in 12 months and from that time forward save $300/month. So in their case it is worth while.

It is a matter of comparing the numbers with your current loan and the new loan. If you really are moving in two years it is hard to justify a refi in high cost states. But it doesn't hurt to get a quote from a couple of lenders - don't have them pull your mortgage scores unless you decide to actually pull the trigger. Give them your mid-mortgage score (not FICO 8 score) from here - the 3b report (soft pull) so the various lenders can give you accurate figures.