Should I Refinance My Mortgage Now or Keep Waiting?

Speaker A00:00:37

Mortgage rates are changing again, and everyone seems to have an opinion. Refinance now. Wait a little longer. The rates are going to come down again.When you're talking about one of the biggest financial decisions of your life, following the crowd is not enough. So today let's figure out how to know if refinancing actually makes sense for you. Because lower rates don't automatically mean you should refinance.The smartest decision depends on your goals and not the headline. So stay with me today, and I promise you by the end of today's episode, you're going to know the right questions to ask before signing anything.Going to be a great show today. Hello and welcome to Financially Confident Christian.I'm the financial evangelist Ralph Estep Jr. And I just want to thank you so much for joining me today. And this is one of those questions that homeowners ask every time interest rates start to move, whether they move up or they move down.And that's the question, Should I refinance now? Should I wait for rates to fall further? And how do I know if refinancing will actually save me money? I want to tell you something right now.From an accounting perspective, even a small rate change can feel like a big opportunity. But the key is not that. The key is making sure it's a real one and not just a distraction. That's what we're going to talk about on today's show.Now, if you've got a question that you need help with, I would love to answer your question right here on the show. You can reach me by going to financiallyconfidentchristian.com/question We'll put a link right in the show notes.But again, that's financiallyconfidentchristian.com/question Let's get right to today's listener question.Hi, Ralph, I bought my house a couple years ago when mortgage rates were much higher than they are today. And lately I've been seeing news stories saying that rates are starting to come down and several of my friends have already refinanced.Now, part of me wants to wait because maybe rates will fall even more. The other part of me worries I'll miss my chance if I wait too long. Ralph, I'm confused because everyone seems to have a different opinion.How do I know when refinancing usually makes the most financial sense? Thank you so much. Well, thank you for sending in this question. And you're right, there are all kinds of opinions about this.So today I want to really decipher what's the best for your situation. I Want to start by saying something rather bold. Refinancing isn't about chasing the lowest rates. It's about improving your overall financial picture.I want to say that again because so many people get hung up on, well, but the rate's this, the rate's that, I'm doing better. No, it's not about that. It's bigger than that. You've got to understand your overall financial picture.So we're going to walk through five questions that will help you decide what to do today. Very practical steps we're going to have today. It starts off with knowing your current numbers. You got to start with your existing mortgage.You got to know your interest rates. So many people I talk to have no idea what their interest rates are. They might say, well, I bought when the interest rates were higher.I bought when the interest rates were lower. But know your interest rate. Know your monthly payment, you got to know what that is. Know your remaining balance.Those are really the three things that you've got to know your interest rate, your monthly payment and the remaining balance. Because you can't compare options if you don't know where you're starting. You can't measure a better deal until you know the one you already have.So that's where it starts off. Know your numbers. Second thing, look at the total cost.A lot of people lose sight of this, they just see that rate and go, well, the rate's lower than what I'm paying. You got to look a little deeper than that. A lower interest rate sounds great. Absolutely it. And generally it is.But the thing you've got to take a pause here. Refinancing usually also comes with closing costs and fees. They don't tell you about that part. We'll just build it into the loan.So you've got to really calculate how long it takes to recover those costs.And what I mean by that is if you're planning to move, you're planning to sell this house, you're going to have to really consider whether refinancing makes sense. Big picture, you got to understand whether the savings outweighs the expense.That's why I said earlier, you got to focus on that long term financial benefit, not some short term excitement. Hear me on this. And this is the headline of the whole show. A lower rate isn't automatically a lower cost to you.So you got to think about how long you're going to stay. Are you planning to move within two years or are you going to stay for another 20?The longer you remain in at home, the more valuable that refinancing can become, because time matters. Time value of money matters. Your future plans. And you might not know what those are, but you might have an inkling of this.Your future plan should shape today's decision. Because in the end, the best mortgage is the one that fits the life you're actually living.Not what everybody else is living, not what the headlines tell you should be living. So don't let the news make the decision. Financial headlines are designed to do one thing. They're designed to grab your attention.And man, they are grabbing it. Because you hear this one saying this and this one's saying that there aren't written specifically for your situation.So you got to ignore that pressure to act quickly. You got to get past that fear of missing out. You got to make decisions based on your numbers. The wisdom that you're seeking is personal.Those headlines are speaking to the crowd. Wisdom speaks to your situation. But in the end, you got to make the savings count.If refinancing lowers your payment, which it could, and it might be the right decision to make. I am not the one saying to you, don't refinance.I actually think there is an opportunity to refinance now, because this isn't a popular opinion, but I actually think interest rates are at the lowest they're going to be for a while. Again, you can check the math, you can see what you think. But I think we're at a place where they're actually going to start inching up.But it doesn't mean if you refinance, you save money, that you go spend that money, that this is a great time to use that money intentionally. Pay down that principle. Build that emergency fund. Yes. Ralph talks about emergency funds all the time. This is a great time to do it.Make that investment in your future. Let those savings that you might very well get today strengthen your tomorrow.Because that smaller payment is only a blessing if it improves your future. And that's what this we've been talking about today completely. Is this the right decision to improve your financial future?But I want to go a little deeper in what you said, because sometimes we think wise stewardship means always finding the lowest price. I hear that all the time. Over. I'm being really wise. I got the lowest price, but it doesn't always fit.Sometimes it simply means making thoughtful decisions instead of emotional ones. Here's what faith doesn't promise us. Our faith doesn't promise us perfect timing.It doesn't promise us we're always going to catch the absolute lowest interest rate. And it doesn't promise us that every financial decision is going to feel obvious.Some things, they might seem like they're the right decision, but they're not necessarily the best for your situation. But here's what fate does promise us. God gives us wisdom generously if we ask him for it.We don't have to have some crystal ball to predict the future. We simply have to be faithful stewards of today's opportunity. And living in wisdom is more valuable than perfect timing. Patience protects us.God leads faithful stewards to better decisions. And peace is a better guide than panic. So trust God while you're going through this. Trust him while you're doing the homework. Friend.You don't have to make the perfect decision. You simply need to make the wise one. Financial confidence grows when decisions are based on wisdom instead of urgency.So stop chasing those headlines. Stop worrying about what this one did and that one did. Take your time. Go through the five things we talked about. Ask good questions.So here's your win for today. Review your current mortgage.Write down your interest rate, your monthly payment, your remaining loan balance, and compare those financial refinancing offers using total cost, not just the interest. You got to understand that it's bigger than that. The best financial decisions begin with understanding your current situation.So understand your current situation. First, let's get right to today's Bible verse. It comes to us from the book of Proverbs, chapter 15, verse 22.It says, Plans go wrong for the lack of advice. Many advisors bring success. And I just love this verse. It kind of defines what I do as an accountant.Major financial decisions deserve careful planning and wise counsel. Reaching out to people like this show, talking to other people. Wise counsel helps us avoid costly mistakes.Good stewardship includes asking questions and preparation. Hear me on this. Preparation leads to better outcomes. How about we pray together right now?Heavenly Father, I just want to thank you for providing homes to us, Lord, and shelter and every blessing you've entrusted to us. And I just ask right now that you would give us wisdom as we make important financial decisions.Help us to avoid acting out of fear or acting out of excitement. Teach us to seek wise counsel, Lord. Understand the numbers and make choices that honor you.And Lord, may every financial decision strengthen our families and increase our ability to serve others. And we ask this in Jesus name. Amen, friend. Refinancing isn't about chasing headlines.It's about understanding your numbers, knowing your current mortgage, counting the total cost, and thinking long term. And then if you do that, using those savings wisely and trusting God throughout the whole process. So know your current details.Compare the total cost, not just the rates. Consider how long you're going to stay in your home and ignore. Listen to me. Please ignore this financial hype.And if you do decide to refund, if it's the right thing for you, put any monthly savings to work to improve your financial situation for the long term. Now, maybe right now you're facing a dilemma. You're facing a financial question. You're like, ralph, I need wise counsel.I would love to offer you that wise counsel. The best way to reach me is to go to financiallyconfidentchristian.com/voicemail we'll put a link right in the show notes.You just click on the link and record your voice. I want to hear from you again. That's financiallyconfidentchristian.com/voicemail thank you so much for joining me today.I promised you receipts today and I hope you feel like I've delivered those. So share this episode with somebody else who might be hearing all this hype and is trying to decide what to do.As I always encourage you, stay financially savvy. Seek that discernment. Seek that wisdom. May God bless you and you have a truly great day. Happy.