WHERE DO I GET STARTED?
Talking to a mortgage banker is the best way to find out what your new interest rate and projected payment will be. Based on your credit score, they can give you a good idea of your potential mortgage refinance rate. Armed with this information, you’ll be able to calculate your monthly savings and determine if the cost of mortgage refinancing is worth it.
Don’t forget: Talking to your Atlantic Bay Mortgage Group Mortgage Banker is the best way to clear up any refinancing question you may have.
Determining if refinancing is worth the costFirst, subtract your projected new monthly payment from your old monthly payment to calculate your monthly savings. Then divide the closing costs of your new loan by the monthly savings. Be sure to include any discount points, as well as the cost of an appraisal and credit report in your closing costs. The figure you end up with will be the number of months it will take to break even.
If you plan to stay in your home longer than it would take to break even, loan refinancing may be a good idea.
The costs of refinancing
The value of your home is an important factor in determining your mortgage approval. A professional appraiser usually charges between $300 and $700 to determine the value of your home.
The cost to pull your credit report and any other additional credit supplement reports. The cost can run you from $25-$65.
Also known as “points.” This is a percentage charged to buy down the interest rate so that monthly payments are lower. Points are only charged one-time and may be tax-deductible in the year they are paid. In a refinance, points are often added to the loan amount to avoid upfront payment. Discount points vary based on individual client scenarios and market conditions.
The title search fee usually ranges between $150 and $450. The title examination is done to verify if there are any other liens against your property.
Lender fees generally cover the administrative costs to do your loan. They are also known as application, underwriting, processing, document preparation, or origination fees. Lender fees can be charged in the form of a percentage or a flat fee.
When you refinance, your first payment will not be due for 6 to 8 weeks, but you’ll have to pay interest for the remainder of the settlement month. If you close on the June 20th, for example, you’ll have to pay 10 days of interest at closing. Typical cost: Depends on loan amount, interest rate and date of closing.
Additional refinancing costs
Other costs, including flood certifications, pest inspections, courier services, title and recording fees and various tax fees should also be included in your refinancing cost calculations. Although most of these additional refinancing fees are relatively inexpensive, you should consider them when deciding whether mortgage refinancing is worth the cost.