When refinancing your home, it's helpful to know a few things about
refinancing. When you refinance, you usually pay off the old loan and
sign for a new loan, whether you are refinancing your 1st mortgage,
second mortgage or home equity loan. The expense that comes in to play
when refinancing are the new closing costs and points charge for
getting a new loan.
How much can you expect in closing costs for a refinance? Usually
between 3-6% of the total loan amount. So, for a loan amount of
$150,000, you can expect to pay around $7 in fees. Usually, a company
that will say that have no closing costs, will also charge a higher
interest rate to compensate. The mortgage broker has to make money
somehow, they will either charge a higher interest rate or charge
higher closing costs. The best way to compare refinance lenders is to
analyze all of the expenses.
Should I pay down points on my loan? If you plan to stay in your home
for more than 3 years, it may be smart for you to consider paying down
points on the loan which reduces your interest rate. That pays off if
you plan to stay in your home for a while, but if you plan to sell the
home soon, you may lose more money paying down the points on the loan.
How can I know if I should refinance or not? If you are interested in
finding out whether it would save you money in the long run to
refinance with the current interest rate, there are financial
calculators online that can help you determine if you would save money
refinancing your house or not.
To view our list of recommended refinance mortgage companies online or
to use a refi- calculator, please visit this page:
http://www.abcloanguide.com/refinance.shtml
