Here is the new way of thinking.
"The rule of thumb is around 50 basis points, or half a percentage point," says LendingTree.com's Chief Economist Tendayi Kapfidze.
Kapfidze says you should start looking for a refi when you start reading about rates a third of a point lower than what you currently pay. Why? The publicized rates are just averages.
"If the average is 3%, the lowest rates in the marketplace might be 2.6 or 2.7," says Kapfidze. "So that means that there's a greater opportunity there than most people realize."
Opportunity means money in your pocket.
Now let's talk about the fear of refinancing. Alany Wouters is a sophisticated consumer; she reads all the fine print and advocates for her family and others.
"I am concerned that the bank will refuse payments after a refinance and cause a foreclosure on the house," Wouters says. "I've had that happen to a friend."
She says she knows of two individuals who went through that.
"Certainly it's a complex industry and it's a complex transaction, so sometimes not everything goes well," Kapfidze says. "But I think for the vast majority of people who I have been refinancing over the past year, they've had a pretty good experience and people have saved a lot of money."
In a Forbes survey, more than a third thought refinancing costs would be too high to save them money. They could be right, but don't make that assumption. You have to run the numbers to know for sure.
And finally, there is a thing called "mortgage burnout." Consumers just don't want to go through the process again. If that's you, you might want to reconsider. Lending Tree says the average refinanced mortgage in the Bay Area is for $400,000, which can save the homeowner $50,000.
Take a look at more stories and videos by Michael Finney and 7 On Your Side.
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