When should you refi mortgage?

[DeniseNJ]

I am into year 4 of a 7/1 ARM at 3.75%.  Also have a HEL for about 30K at 7%.  I see I can get a refi for the entire 300K, original mortgage and HEL, at 4% with like 100 bucks closing costs (negative points) for a 30 yr fixed.  I may only live here another 10 years. 

I know the math should be like 270K times 3.75% plus 30K times 7% is greater or less than 300K times 4%--this doesn't take time into account though so don't think it's right.  Is it right?  How big should the difference be before it's worth the effort to refi?  I mean if your total savings are 100 bucks you probably wouldn't bother, but at what point is the savings worth the effort?

[YttriumNitrate]

So right now, you are paying $12,225 in interest, but if you refi you'll be paying $12,000 a year in interest. The real savings is not the $225 a year you'd save now, but the $3,600 a year you'd save if your ARM adjusts up to 5% in a few years.

[norajean]

You should refi any time the cost and hassle of the refi is less than the net present vale of the savings under the new lower interest rate.

[TomTX]

You should refi any time the cost and hassle of the refi is less than the net present vale of the savings under the new lower interest rate.

The hassle of a refi has gone way up since the last time I did a refi (which was 10+ years ago) - now they want an onsite appraisal with detailed photos of everything inside and out. Ugh. House is way too cluttered for that. Plus considerably more paperwork (two years of taxes plus permission to verify with the IRS, plus three paystubs, etc).

Last time was "Eh, we can use whatever the tax assessor says as the appraisal, and for income just a paystub"

[Dicey]

Just for fun, you might want to cross post this question over here:

https://forum.mrmoneymustache.com/throw-down-the-gauntlet/dont-payoff-your-mortgage-club/1750/

It's sure to generate further discussion and more opinions.

[Clever Name]

You should refi any time the cost and hassle of the refi is less than the net present vale of the savings under the new lower interest rate.

The hassle of a refi has gone way up since the last time I did a refi (which was 10+ years ago) - now they want an onsite appraisal with detailed photos of everything inside and out. Ugh. House is way too cluttered for that. Plus considerably more paperwork (two years of taxes plus permission to verify with the IRS, plus three paystubs, etc).

Last time was "Eh, we can use whatever the tax assessor says as the appraisal, and for income just a paystub"

I just did a refinance about a month ago, and while they did want last year's tax return they also accepted the tax assessment as the current value without requiring an appraisal. I think a lot probably depends on the underwriter you get.

[Dicey]

You should refi any time the cost and hassle of the refi is less than the net present vale of the savings under the new lower interest rate.

The hassle of a refi has gone way up since the last time I did a refi (which was 10+ years ago) - now they want an onsite appraisal with detailed photos of everything inside and out. Ugh. House is way too cluttered for that. Plus considerably more paperwork (two years of taxes plus permission to verify with the IRS, plus three paystubs, etc).

Last time was "Eh, we can use whatever the tax assessor says as the appraisal, and for income just a paystub"

I just did a refinance about a month ago, and while they did want last year's tax return they also accepted the tax assessment as the current value without requiring an appraisal. I think a lot probably depends on the underwriter you get.

And the state you're in.