Should you sell or refinance your home?

Here are the quickest and easiest calculations and considerations to help you make the right choice.

First ask yourself a few questions:

• Why are you considering refinancing or moving?
• Does this house still fit my needs?
• Will this house still fit my needs in 5 years? 10 years? 20 years?
• Can I afford the payments on this house?
• Can I afford the cost to maintain this home for the length I plan to stay?
• What is your credit score? (It will affect your rates and terms.)
• Where will I live if I move?
• Will a better location benefit me? (shorter commute, better school district, closer to friends/family, etc)

The double check the finances:

Calculate the break even point if you refinance. Break-even point = Total closing costs (estimate 3% of the home value up to $10,000) ÷ monthly savings. If you plan to keep the house for less than the break-even time, you probably should stay in your current mortgage. A refinance can cost more money in the long run if you start your new loan with a 30-year term. Use Bankrate's mortgage calculator to compare your own loan scenarios:

• See what happens when you input different mortgage terms (in years or months).
• Reveal the amortization schedule to see how much total interest you would pay.

Calculate the break even point if you Sell. Break-even point = selling cost (estimate 10% of sale price) + mortgage due and liens. You never want to underestimate and be stuck in a corner with a contract to sell and you can't afford to do it. The cost to sell isn't just agent fees. There are state taxes and transfer fees, repairs, moving costs,and any debt associated with the home. Compare your own scenarios by meeting an agent to help you run the numbers or do these calculations:

• Start with the tax value on your statement. Depending on the housing market and any renovations/additional sq ft you have done to your home, it's a starting point. Tax value $300,000 x 10% ($30,000) + mortgage owed ($250,000) = Safe Break-Even ($280,000) giving you $20,000 toward your next home.
• Look at a market report and see if you can find a home EXACTLY like yours and (age, style, location, condition, etc) that has sold in the last 6 months and run the numbers based on that home's price.

Get advice and help with the numbers. EXPERIENCED Realtors, mortgage processionals, tax accountants and financial planners work these scenarios everyday. Find trusted advisers in each of these areas. Need help connecting with these professionals? Call Sarah first!

If you have debt issues that are threatening your home, please contact an attorney BEFORE you refinance your home. Using the equity in your home to pay debts could be a waste.