MAAJABU:VIDEO HII HAPA HEBU JIONEE MTOTO ALIYEZALIWA AKIWA NA MKIA WA SAMAKI

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That’s the simple math. You also want to look at whether you’re lengthening the time it will take to pay off your home and how much principal and interest you will have paid at the end of the break-even period or by the time you sell the house.

Even a “no-cost” loan has costs, though the lender fees may be replaced by a higher interest rate. “If you’re taking a zero-cost loan, you’re not getting the best rate,” says Casey Fleming, author of “The Loan Guide: How to Get the Best Possible Mortgage” and a mortgage professional in the San Francisco Bay Area. Some loans add the closing costs to the loan balance, which means you’re financing them over 30 years.

If you’re going to stay in the home, paying points (fees based on your loan size) to get an even lower interest rate might be a better deal. “If you keep the home, it’s by far the cheapest way to go,” Fleming says. “If you’re going to keep it more than about five years, it makes sense to pay as many points as a lender will allow you to get the lowest rate possible.”

And you don’t need to worry about dinging your credit since refinancing doesn’t hurt your credit score in any meaningful way.

“It doesn’t harm you in any way with the exception that you’re always restarting your amortization period,” Fleming says. “Every time you get a new loan, your score drops. Once you demonstrate you’re making payments on the new loan, it goes back up.

Cash-out refinancing, in which people refinance into larger loans as their home’s value grows, is regaining popularity as Americans add more equity, Fleming says. This can be good option for homeowners who want to remodel their home or build an addition, but it can be trouble for people who take cash out for the wrong reason – to buy a car, for example – which will be long gone before the 30 years of payments are made.

If you’re taking out cash to pay off credit card debt, experts warn you to be careful. If the debt was caused by a one-time event such as a health crisis or job loss, refinancing might be a good alternative to paying 24 percent interest. But if you ran up credit card debt because you’re spending more than you make, refinancing may be a mistake.

“If they’re refinancing to pay off credit card debt, then why are they overextended?” says Sylvia Gutierrez, a mortgage professional in Miami and the author of “Mortgage Matters: Demystifying the Loan Approval Maze.” “Some people continuously mismanage their money and refinance to catch up.”

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