When's the best time to refinance your mortgage?

With the Federal Reserve recently cutting interest rates, many homeowners were wondering when might be the best time to refinance their mortgages. It hasn't gone completely, maybe as they planned. Those rates have been actually inching a little bit higher here more recently. Here with some helpful advice to know what is best for you is money and business expert Derek Kinney. Derek, I know a lot of people have been sitting around thinking about this for awhile as mortgage rates have been running up. When do you think is the best time to be refinancing your home mortgage? Yeah, Jason, great to see you. So right now the average 30 year interest rate is at 6.5%. So if somebody watching right now has an interest rate of about 8% or maybe 7.8% or higher, they might be a prime candidate to refinance. So what you want to do is call the person or the bank who you bought the loan from and say, look, I'm considering refinancing my mortgage. What are the fees and what are the breakeven costs if I were to refinance? The worst thing to do is refinance and it costs you more money than you save. We want to help save our viewers that heartache. Yeah, a lot of those folks, I guess, who are eligible now who might benefit from a refinance may have bought like late last year. Early this year when those rates were really running up Derek, it'll be interesting to see if those mortgage rates continue to come down as we go through the months ahead. If people can save some money this way, what advice do you give them? About, you know, let's say you're able to save a couple 100 bucks, maybe several 100 bucks a month from your old payment to your new one. What do you recommend people do with that money? Not to buy the new truck and not to buy the new computer. So many people take their savings and they spend it. I call this capture and keep. It helped me pay off my own house early. It's helped clients pay their houses off early. What you want to do is you've got a choice. You can either take the savings and put that toward your highest interest rate debt or refinance it to a shorter note. And what that does is it saves you tons of interest. It cuts back on the principal you have to pay, but it lets the debt be paid down a lot quicker. So don't think about taking the money to spend it. Put it back toward the house and pay it off quicker is the best way to go. All right, so best to focus on paying off your home or investing the money in something else. It's sort of a choice that you make, I guess. What would you say is the biggest mistake, though, for people if they do refinance and they do see that difference? Yeah, the biggest mistake is they take the savings and they buy something else on payments. And now they're paying debt over the long period and they're paying interest. And they actually have put themselves in a worse financial situation. I talk about this often. If you call your cable company, call your electricity provider, call your phone company and let them know, look, I'm considering changing. How can I save some money when you capture that money and then you keep it, pay it off toward debt? It's a way you could shave off years off of your home interest without having to tap into your budget and take money from there to pay off the house. So the key is if you have savings, use it to pay off debt. That way you're going to be in a financial better position a whole lot faster. Always so disciplined, Derek. You're like that little angel sitting on our shoulder, telling us to do the right thing instead of going and blowing that extra money that we saved. Derek, thanks as always for doing this with us. My pleasure. Thank you, Jason. Always appreciate it.