If you’re considering a new home loan and are asking the question “Should I Refinance My Mortgage” there are several things you need to know about junk fees and markup. It’s true mortgage rates are at historically low levels and the media is beating their refinancing drum; however, what you’re not hearing about are the ways lenders and loan originators take advantage of homeowners. Here are several tips to help you answer the question “Should I refinance My Mortgage” without losing money in the process.
Should I Refinance My Mortgage Pros & Cons
Like most homeowners you’re probably considering refinancing to save money with a lower payment. It makes sense, lower your interest rate and your monthly payment goes down. The only problem is that it costs money to refinance your home and it’s smart to factor in this expense before answering the question should I refinance my mortgage for yourself. The fees you’ll be required to pay when refinancing include closing costs and origination fees, some of which are legit and some are pure garbage.
Should I Refinance My Mortgage: The Two Percent Rule
If you do any amount of research online when answering the question “Should I Refinance My Mortgage” you’re likely to encounter the two percent rule. Now whoever coined the “Two Percent Rule” was truly a bonehead as this “rule” states that you should never refinance your mortgage unless your new mortgage rate is at least two percent lower than your existing home loan’s rate. If this were good advice practically no one would be refinancing and we wouldn’t be here today. Instead of relying on some bonehead’s epically bad advice it makes more sense to base your answer to the question “Should I Refinance My Mortgage” on a cost/savings basis.
Evaluating your refinancing options like this tells you how long it will take to recoup your expenses and makes it easier to recognize and avoid junk fees. How do figure out how long it will take to recoup your expenses when refinancing? It’s easier than you think. First, figure out what your new monthly payment will be using a basic home mortgage refinance calculator. Subtract your new lower payment from your old payment and you’ve got your monthly savings with the new home loan. Next, total up all of your closing costs including any loan origination fees you’re paying the person arranging your new mortgage. Divide this total by your savings and Voila! you’ve got the number of months it will take you to recoup your expenses from taking out a new mortgage loan.
How to Maximize Your Savings When Refinancing
You can maximize your savings ensuring that it will take the least amount of time to recoup your expenses in two ways. First, get the lowest possible mortgage rate by avoiding your broker’s commission based markup of your mortgage rate. There’s a whole free video series available on this website on how to get the lowest possible mortgage rate when refinancing. Second, keep your loan origination fees as low as possible and weed out all of the unwanted junk fees from your closing costs. It’s not as hard as you think, in fact, following the system in my free Underground Mortgage Refinancing Videos will not only show you how to do all this but save you time in the process. You’ll keeps thousands of dollars of your hard earned cash and look like financial genius to your family and friends.
You can learn more about answering the question “Should I Refinance My Mortgage” by checking out my free Underground Mortgage Videos.
Here’s a quick sample to get you on track to cutting a hundred dollars of fat from your monthly payments. That’s $1200 a year you could be using for other things…
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
