“Refinancing NOT Always a Good Idea”

“Refinancing NOT Always a Good Idea”





Hi, Joe,

Thank you for reaching out as you were referred to me by my real estate agent. Long story short, I was wondering about refinancing rates on my mortgage in Vermont.  My home has been for sale for about 6 months with no bites in sight, and to make up some of the loss, I’ve started short-term rentals there (AirBnB).  My principal balance is roughly $140,000 and the home is worth roughly $250,000 I believe.  I purchased it in 2006 for $235,000 and have put a lot of money into it.  My mortgage rate is in the 4.6-4.8% range (it’s fixed, but I can’t remember the exact amount).  I refinanced in 2011 to get this rate on a 30-year loan.  So perhaps I’d do well to refinance at a 20-year loan term (?).  Could you provide options, rates, and suggestions?  I’m looking at refinancing in case it doesn’t sell in the near future and I continue to do short term rentals.  Thanks so much!



I’m a math guy, refinancing this loan doesn’t make any sense. Sure, the rate will be a little better but how about the closing costs? It becomes further complicated that the client really wants to sell the property, so the closing cost expense doesn’t make sense.


Even if the decision was made to keep the property, it would make more sense to prepay principle each month and accomplish the same result. The client is already 8 years into the current mortgage, for sure the math doesn’t work.

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com



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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comment balloon 3 commentsJoe Petrowsky • February 14 2020 03:01PM


Good morning Joe Petrowsky with mortgages, it's all about the math....

Posted by Barbara Todaro, Marketing Agent for The Todaro Team (RE/MAX Executive Realty ) about 1 month ago

This is so true, unless the rate drops over 2% and closing costs are managable and can be recovered in 12-18 months!!!

Posted by Sham Reddy CRS, CRS (H E R Realty, Dayton, OH) about 1 month ago

Good morning Joe. Some in the lending business would be processing a loan. Just sayin! Congrats to you for the proper advice. Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) about 1 month ago