What does it cost to refinance? What are the benefits?
Have you ever heard the old rule of thumb, you should only refinance if your new interest rate is at least two points lower than your current interest rate? That was never actually true. Refinancing has a number of benefits that often make it worth the up-front expenditure many times over. Or if you plan to leave the home in under two years or less, you should look at a no closing cost mortgage loan that has instant benefits.
When you refinance, you might be able to lower your interest rate and monthly payment -- hopefully significantly. You might also be able to "cash out" some of the built-up equity in your home, which you can use to consolidate debt, improve your home, take a vacation -- whatever! With lower interest rates and balances, you might also be able to build up home equity faster with a shorter-term new mortgage.
All these benefits do cost something, though. When you refinance, you're paying for most of the same things you paid for when you obtained your original mortgage. These might include settlement costs and other fees, an appraisal, lender's title insurance, underwriting fees, and so on.
Ultimately, for most people the amount of up-front costs to refinance are made up very quickly in monthly savings. We'll work with you to determine what program is best for you, considering your cash on hand, how likely you are to sell your home in the near future, and what effect refinancing might have on your taxes.
Don't forget , we can price the loan any way you want. No points, one point or a no closing cost loan where you have actually no hard costs. (Free)