If you’re still on the fence about mortgage refinancing or are a serial procrastinator here are seven reasons to get busy on your refi. According to BankRate.com the number one reason for a new home loan is to take advantage of the best refinance rates in nearly fifty years. Mortgage refinancing with a better rate can significantly lower your payment. Here’s the other six reasons according to BankRate:
The average interest rate on an outstanding mortgage at the beginning of 2010 was 5.979 percent, according to the Bureau of Economic Analysis. However, lenders today are offering rates well below that benchmark, making a refinance a no-brainer for many.
Once you’ve decided mortgage refinancing is right for you, it’s important to understand the fees you pay determine how good of a deal you’re getting for your home refi. These fees include the broker’s origination fee and any closing costs that you’ll be required to pay.
Common mortgage mistakes include not keeping tabs on the fees because you’re getting such a great interest rate. The reason fees are important is not just because this is your cash but you’ll have to recoup these expenses before gaining any benefit form that low mortgage rate. The more you pay at closing, including wasting money on lender junk fees, the longer it will take you to recoup the origination fee and closing costs.
What about those no fee refinance offers? Why not let the lender pay your closing costs or roll them into the loan balance? The problem with lender paid origination fees and closing costs is that you’re giving up that lender’s best refinance rates in exchange for them paying your fees. This can add as much as $100 a month to your monthly payments for many homeowners. Why would you want to pay $1200 a year to save a little over $3,000 at closing?
You can learn more about avoiding unwanted markup and junk fees by checking out my free Underground Mortgage Refinancing Videos.