When does it make sense to refinance?

Until this decade, there was a solid rule of thumb:

        Don't refinance your loan unless you can save two points on the rate. In that era, you had to save a great deal to make up for the points it cost to get a loan. In fact, for most of this century, all loans typically cost a two-point loan fee.

        The good news is that you can have loans with no points. In many cases, you can also get a loan with no points and no closing costs.  As you may know, you will get a slightly higher interest rate if you want a no-points, no-cost loan. Of course you always have the option of paying points to get a lower rate. We offer you several choices:

                         (1) No points
                         (2) No points and no closing costs
                         (3) Paying points to get an even lower rate.

                    The choice is always yours.  If you get a loan with no points and no costs, it may actually make sense to refinance to lower your payment by as little as one quarter of one percent. The goal is to make certain that your new loan saves you money.