Some Points To Consider Before Refinancing Your Mortgage

August 13, 2019

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Mortgage rates are the lowest they’ve been since 2016. So perhaps it is time to refinance your mortgage to get that lower interest rates. But before you race to the bank, there are some considerations to ponder.  As with any refinance, there are fees. That means you pay closing costs again which can include bank fees, appraisal fees and attorney fees, among other things. These costs typically run between 1% and 2% of your total mortgage balance. So if you are re-financing a $300,000 mortgage, you would expect to pay around $6,000 in fees. While paying out $6,000 over 15 or 30 years sounds like a no-brainer, the average person will move over 11 times in a lifetime.  So if you are planning to move within a four or five years, the re-fi savings won't be redeemed in that time window. Also just because you re-finance doesn't mean you'll save money. Refinancing means you sign into a new 15 or 30 year loan, which means you are paying on it for a longer time and therefore paying more in interest. Some situations to consider to make sure a refinance of your mortgage is really a smart move.

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SOURCE: Lifehcker

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