What is the need for refinancing when you have already purchased a house with a mortgage and are paying regular monthly installments? There is one if you find that you are paying more interest than the current market rate of interest. So why should you pay more interest when the market rates are lower? However, you must investigate further to find if there is a real need for a mortgage refinance.
First of all, find out if the low interest rate is a temporary market phenomenon or something that is going to continue for a long time. Usually, interest rates come down when the economy is not doing well. In an economic downturn, people tend to save more and delay their home purchase decisions. But as soon as the economy swings, the interest rates will start climbing up. But it is a good idea to refinance any day, if you are getting lower interest rates.
Second, find out whether there is a chance of further reduction in the interest rates so that you can wait for a few more months. For this, you must keep in touch with the latest market news and speculations and follow the trends in the industry. As mentioned earlier, any sign of the economy picking up will raise interest rates and waiting too long will not be profitable for you.
Third, you must consider at what stage of your mortgage repayment you are in. For instance, if you have only 5-6 years remaining and the market interest rate is not significantly lower, it might be a better option to continue status quo without getting into the hassles of re-evaluation and paperwork. On the other hand, if you have recently taken up the loan, then it is surely worth getting a mortgage refinance despite the additional effort.