Refinancing Costs What To Expect

Refinancing Costs What To Expect



Refinancing Costs - What to​ Expect
Refinancing your current mortgage is​ a​ wise financial decision if​ you​ can recoup the​ costs of​ a​ refi .​
An average refinancing deal,​ you​ can expect to​ pay between two and six percent of​ the​ loan amount if​ fees and points .​
On average if​ you​ can lower your interest rate by two points,​ then you​ will usually come out ahead in​ the​ end.
Normal Mortgage Costs
Refinancing your home is​ just like taking out your mortgage the​ first time .​
All the​ loan costs you​ paid for your original mortgage,​ you​ will have to​ pay again .​
Usually these had up to​ $2000 in​ fees plus at​ least one point .​
Fees will be included for application,​ appraisal,​ survey,​ attorney review,​ and title search.
Besides the​ loan origination fee of​ 1%,​ you​ can also expect to​ pay a​ couple of​ points for lower rates .​
Points are flexible though .​
You can choose to​ pay no points for a​ higher rate,​ or​ a​ couple of​ points for lower rates .​
Base your decision on​ how cost effective points would be .​
Using an​ online mortgage calculator can help you​ figure the​ costs and savings of​ each option.
Extra Fees For Refinancing
Besides regular mortgage fees,​ you​ may get stung on​ a​ prepayment penalty or​ private mortgage insurance .​
Prepayment fees are prohibited on​ federally back loans,​ such as​ FHA or​ VA mortgages .​
Some states also limit prepayment fees .​
Check your current mortgage before deciding to​ refinance.
You may also be hit by private mortgage insurance (PMI) if​ you​ decide to​ take out your equity .​
This can add up to​ several hundred dollars a​ year .​
But if​ you​ have a​ government backed loan,​ you​ don’t have to​ worry about this issue.
How to​ Decide
When you​ are trying to​ decide on​ whether to​ refinance or​ not,​ take a​ look at​ your loan and home goals .​
If you​ plan to​ stay in​ the​ home for several years,​ then you​ have the​ time to​ recoup costs.
You can also request quotes from mortgage lenders to​ see what kind of​ deal you​ can get .​
With no commitment on​ your part,​ you​ can take a​ look at​ rates and points that are being offered.




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