What to ask or know before mortgage refinancing?

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davester wrote:
If the interest rate is lower on a no-fee loan and there is no prepayment penalty (there seldom is) then go for it. It is silly to avoid saving yourself money because you're worried about the loan period. If you're worried about the clock, simply add a set amount to your payment that goes to extra principal enough so the loan period gets shortened to match your current loan period and then the clock won't reset. The clock is only in your mind. You can generally pay as much as you want above the standard payment and therefore have whatever loan term you want.

If you're at all close to the 15 year mark on your original loan then you should consider refinancing to a 15 year mortgage, which will have a lower interest rate and therefore save you even more money in the long run.

edit: I just noticed Buzz's post above. Yes, you do need to exercise discipline. I've never had an issue with this. I simply set up my bank account to automatically pay the mortgage plus added principal out of my checking account and then forget about it.

Look at the numbers in my post, those numbers prove the clock isn't just in one's head. It's how amortization works. When you refinance, this gets started all over again. In the example I gave, someone could lower their interest rate by 2% and still lose a couple hundred thousand.