According to money.CNN.com, with mortgage rates near 35-year lows, you may be able to cut your payments sharply by refinancing your loan. To qualify for the best rates, you need a credit score of 740 or higher and usually at least 20% equity. Even if you have to settle for a higher rate, a new loan may save you money. The main consideration is whether you will live in your home long enough to offset the refinance closing costs. Your current mortgage payment is $1,658.50 per month, with a balance of $219,800. Suppose you have a chance to refinance at a certain bank with a 30- year, 5.5% mortgage. The closing costs of the loan are application fee, $90; credit report, $165; title insurance, 0.4% of the amount financed; title search, $360; and attorney's fees, $560. You plan to live in your home for at least four more years. Use the Mortgage Refinancing Worksheet to see if it makes sense to refinance your mortgage. MORTGAGE REFINANCING WORKSHEET STEP 1. Current monthly mortgage payment.. STEP 2. New monthly mortgage payment if you refinance.. Current mortgage balance x # of 1,000s to borrow New rate Table 14-1 factor STEP 3. Monthly savings.. Step 1. Step 2. STEP 4. Total refinance closing costs (appraisal, title search, etc.).. STEP 5. Total months needed to recoup your costs.... Step 4 result + Step 3 result STEP 6. Total months you plan to live in your home.. The Bottom Line-If you plan to live in your home longer than the result in Step 5, it makes sense to refinance. (a) What is your currently monthly mortgage (in $)? $ 1658.50 (b) Using this table, what is your new monthly mortgage payment (in $) if you decide to refinance? (Round your answer to the nearest cent.) $ 1248.00 (c) What is your monthly savings (in $) if you decide to refinance? (Round your answer to the nearest cent.) $ 410.5 (d) Calculate the total refinance closing cost (in $). (Round your answer to the nearest cent.) $ (e) How many months would you need to recoup the refinance closing cost? (Round your answer up to the nearest month.) months (e) How many months are you planning to live in your home? months If you're planning to live in your home for at least four more years, does it make sense to refinance your mortgage? O Yes, it makes sense to refinance. O No, it does not make sense.