Once again I find myself talking about our downtrodden economic position. But with everything I write I try to stay positive and find the silver lining. There is an amazing feeling you get when you can take advantage of a bad situation and you should start feeling good. If you haven’t noticed, the interest rates have plummeted and banks are looking to avoid foreclosures or bad debts. You should be asking - “Tropper!! How does this effect me? I am paying my bills and paying down my debt!!”

Now is the time to consider refinancing your property. If your mortgage is over six years old, odds are you are paying a much higher rate than today (obviously, this only applies to a fixed mortgages). Further, if your cutting away at your principle then you should be well on your way to getting a very strong re-finance.

The goal behind refinancing is that you hope to reduce your monthly payment and to pay off your loan faster. Another great reason to Re-Fi is to lock yourself into a fixed , low interest rate. There are rumblings of a rate increase in the fall of 2008 to counter inflation.

There is a pit-fall to the Re-Fi - there are fees involved. Depending on how long you intend on staying in your home will determine whether you will pay back those fees or if you lost money on the deal. Typically, the fees are about $2000 - $3000 (tacked onto your total balance due). Specifically, lenders collect an application fee,  appraisal fee, credit report fees and a closing costs.

General rule: If you plan on moving in less than 2-3 years, Refinancing is not for you.  The basis is that it is going to take some time to break even and truly begin to save some money. This takes about 16-20 months.

The best resource for Mortgages and Financing that I have found is Mortgage.Com run by Citibank.

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