So I'm looking at refinancing our home mortgage since rates are at an all time low. Talked with one bank and could get 3.5%, which is an excellent rate and 3 points below our current mortgage. But, as you remember I make extra payments, which throws us into an interesting quandary. Which is, refinancing, after you factor in the closing costs (which seem exorbitant considering the amount) doesn't save us very much. In fact, if we would apply the closing costs to our current loan as a one time payment the difference is less than a rounding error. However it does lower our minimum monthly payment.
If our current personal economy continues at the same level, it doesn't make much sense to refinance. However, if it has a chance of souring, it makes sense to refinance to have the lower monthly minimum.
So right now I'm in a quandary. Should I commit the funds for a short term lost for a small long term gain, but with the possibility of a securer future should things go south. Or keep on the current plan and save funds for the near future.
Edit, 12-31-11 11pm I think I'm going to go forward with the refinance.