With mortgage interest rates remaining so low, you may be considering refinancing. But keep in mind that refinancing is not for everyone. To figure out if it is right for you, begin by figuring out how long it will take you to recoup your closing costs if you refinance at a lower rate. If you can cut your interest by a significant amount, say a point or maybe even half a point, it might be worth it, but keep in mind that a new mortgage is going to carry thousands of dollars in closing costs, so even if what you’re paying monthly is lower, it will take time to break even. If you decide to go for it, be sure to shop around just as you would if you were in the market for a new mortgage. Rates can vary significantly from lender to lender, as do fees and customer service, so do research and find a lender you trust. Once you find a lender with the rate that you want, be sure to lock it in and hold them accountable to close your deal before the lock expires. Most locks last for 60 days. Finally, understand that although many lenders are advertising no or low closing-cost loans, all loans come with a price. Even if your lender is not charging you when you close the loan, rest assured that you are paying for the fees associated with your loan somehow, whether it is with traditional, up-front costs, rolled into your mortgage balance or in the form of a higher interest rate than you would otherwise receive. Educate yourself and ask your lender to lay out all the different options for you before accepting any offer. And if you do decide to refinance, good luck! Making your way through all the paperwork and documentation that is required can be exhausting, but in the end if you wind up with a significantly lower monthly payment it is worth it!
Thinking of buying or selling a home in Sussex County? Give us a call at Cooper Realty Associates and put us to work for you – 302-629-6693.