how to know if you should refinance your mortgage

Refinancing a home might be the best plan for you. But it’s not always a slam-dunk decision. There are costs and risks involved, which you should know before you decide. Closing Costs: It costs money to refinance.There are closing costs, just like when you took out your original mortgage.”Expect your refinance to run anywhere from $1,500 to $5,000,” says Huffman.

It’s hardly worth it to refinance your mortgage to save $15 a month under these circumstances. Most mortgage experts say you should be able to recoup your costs from mortgage refinancing over a 3-year period. If you’ve saved only $15 a month and it cost you $3,000 in fees, it would take 200 months to break even.

You may be asking yourself when should i refinance my mortgage? In this article we are going to help you understand the different types of refinancing options.

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Clark Howard’s simple rule for when to refinance your mortgage So, if the interest rate you’re paying on your mortgage is significantly higher than the rates you’re seeing now, should you.

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Refinancing may not be a good move if your new loan term stretches into your retirement and you know your income will go down. Thirty years is a long time. Think about what you want your budget to look like in the last ten before you make your decision.

For example, if you currently owe $100,000 on your mortgage and you want to roll in your closing costs when you refinance, you could end up with a new loan amount of $103,000. It’s important to realize that these additional fees are substantial, so don’t jump into refinancing just because you can roll them into the loan amount instead of.

A general guideline for determining whether you should refinance your mortgage is that you should do it only if you can lower your interest rate by at least 2%. While this is a good guideline to follow, it’s not a hard and fast rule when refinancing a house.

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