Are you trying to decide if now is a good time for you to refinance your home loan? With interest rates projected to continue rising, there may be true benefits associated with acting quickly. However, when you refinance your home loan, you will be required to pay various loan fees and closing costs. With a closer look at refinance loan expenses, you can better determine if the benefits of refinancing outweigh the expenses.
Refinance Loan Closing Costs
Generally, you can expect your refinance loan’s closing costs and fees to equate to 2 to 3 percent of the loan’s starting principal balance. In some cases, however, this may be as high as 6 percent. These fees cover title insurance, the appraisal, the survey, the lender’s fee, discount points and more.
The Financial Benefits of Closing Costs
When you consider if it is worthwhile to refinance now, you should define what benefits you will enjoy in exchange for the new loan’s closing costs. Each situation is unique, so a detailed look at your specific benefits is necessary. However, many applicants may be able to set up a lower monthly loan payment, take out cash equity or both. In some cases, applicants may save a fortune in interest charges over the life of the loan. If you will take equity out of your home with a cash-out refinance, consider the financial benefits of doing so. For example, are you planning to pay off high-interest credit card debt or student loans with the cash?
Learn More Today
Before you can accurately determine if refinancing is advantageous, you need to know about the loan options available to you. To inquire about the mortgage loan terms you qualify for, contact MortgageDepot today.
Connect with one of our loan consultants to learn more.
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