Before you refinance read this...

Before you take the plunge on refinancing your mortgage, think about how long you plan to stay in your home and how much the refinance is going to cost. If you're not careful, refinancing could actually end up costing more than it saves!

Remember, refinancing a mortgage is a labor-intensive process. It involves loan officers, underwriters, servicing people, appraisers, legal services - and they all charge a fee. Let's say you can refinance at a 1% lower rate, which decreases your monthly payment by $100. But let's also assume your closing costs on the refinance are $3,000, which means it'll take 30 months to cover your costs. That's why it's important to know how long you plan to live there. If you end up moving in a couple of years, you'll actually lose money!

Of course, if you have excellent credit and a pristine payment history, you may be offered a "no-fee" refinance, which makes the decision easy, right? Not always! Refinancing still costs the bank the same amount of money, so chances are they're burying their fees somewhere in the deal - likely in the form of a higher interest rate!

To find out if refinancing makes sense for you, give me a call. As your local refinance expert, I can analyze your situation, review your current mortgage and outline all the costs and benefits. By accessing specialized lenders with highly competitive rates, I can help you come out ahead on your refinance!

Your trusted mortgage advisor,

Jeff Kerwin

 

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