What you should know about refinancing:
Refinancing isn’t free. You will need to pay for the new loan fees just like you did when you bought your home. These fees will cost around $5,000 and include expenses like appraisal fees, credit reporting fees, and title services.
Some loans can roll in those fees into the loan, so you don’t have to pay at the new loan signing. You might also be required to pay points to get to a new lower rate. If you refinance with your existing lender, you might get a break on some of their fees.
We suggest using a Refinance Calculator to see how those fees and the new length of the loan amount compared to what you are paying now.
Make sure you shop around for the best rates and fees. We use a mortgage broker whose job is to seek out the best rates for us and gather all of the information for us.
Think you are ready to refinance? Ensure you understand the mortgage key terms before you begin, so you aren’t lost when it’s time to talk to the lenders.
Do I still have to pay the mortgage for the month that we refinance?
NO! We have actually refinanced a few times, and we learned the hard way to stop the reoccurring payment for our mortgage. Once, we accidentally forgot to stop that payment, and it wasn't easy getting that refunded back to us.
You get to skip the month’s payment when you refinance. You can use that money to pay an extra payment towards the principal or use it for paying down other bills.
You will also get the money held in the escrow account refunded back to you. This helps with some of those fees you will have to pay.
Take control of your personal finances, and feel empowered!
2020 was a challenging year for many. But through careful budgeting and keeping an eye on your outgoing money, you can take control of your money and feel like you have some power in this chaotic time.