Time to refinance?

Interest rates are plunging, and the big question for homeowners is whether it makes sense to refinance at a lower rate.

Today’s Wall Street Jouornal has a column that explores the pros and cons. In a very generalized nutshell:

If you are planning to move or even pay off your loan within the next few years, refinancing probably makes little sense because you won’t be paying monthly bills long enough for the savings to cover the costs.

…. If you plan to stay in your home for years, and you are currently in an adjustable-rate mortgage, you should strongly consider a refi. ARMs are incredibly dangerous – the financial equivalent of Russian roulette, but with multiple bullets. Refinancing into a 30-year fixed-rate loan may not cut your current monthly payments by much, but it gets rid of the risk that those payments will suddenly skyrocket.