Home refinancing closing costs should be consider before signing a contract. You can actually lose money on closing costs if you arent careful. Shopping lenders can help you find lower fees, but you may find other financing options have lower costs.
Length Of Time To Recoup Costs
While the general rule of thumb is to keep a loan for two years to recoup closing costs, it isnt a hard fast rule. For one, if you only have five years left on your loan, then refinancing wont save you money since you have already paid most of the loans interest. There are also other reasons for refinancing, such as reducing terms or improve caps on an ARM.
To know if you can save money by refinancing, take the time to do a little math. Add up your current mortgages interest costs for the rest of the term. Compare this with the cost of refinancing and the new loans interest cost. If you can see a savings, then refinance for those better rates.
Lenders Charge Different Fees
Most people are surprised to find that lenders charge different fees. While the standard is a couple of thousands, points can also increase costs. Since rates and fees vary so widely between...
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