The question for many is whether it’s a good to refinance now given both the current interest environment and state of the housing market.  There is no one solution for all and like any other debt related issues each one’s circumstance is different.

Mortgage interest rates are at decade lows and just last week they edged down again. Will trend continue? Housing sales after rebounding for a few months are now once again sagging as the government one-time credit expired.  In the equation of refinancing interest rates play a bigger role than demand for housing. However, sluggish demand for housing can cause rates to drop, to lure more buyers.

Will mortgage interest rates continue to drop? That is the 64 million dollar question. However, given how low they are the probability that they will drop much more is unlikely.  There are greater chances that they will eventually rise as the economy recuperates.

It then becomes a decision based on your current circumstances. Is your current interest rate on your mortgage at 1% higher? Than you should definitely look at it. If it’s more than 2%, it’s an easy decision and the answer is yes. Another key factor is how old is your mortgage loan? For newer loans it makes sense to refinance since most of the monthly payment is going to interest. For loans older that seven years it’s usually on a case-by-case basis and may not be wise since the majority of the monthly payment is now being applied to principle.

Besides theses factor you have to consider all other cost involved in the refinance to see if it makes sense. There are great opportunities right now especially for those with sound credit.

If you do decide that refinancing makes sense for you. You can also implement a debt elimination plan to pay off your credit card debt. The monthly savings produced by the new lower mortgage payment can applied to reducing other debt.  Applying this approach will allow you to get out of debt quickly and become debt free