Things to Remember when Refinancing
Appreciation & Appraisals:
If you have been in your home less than 1 year the lender will use the sales price to determine your loan to value NOT the appraised value. So if you are close to that one year mark ask yourself and your lender “Does it makes sense to wait to refinance so you can use any appreciation to help your rate & terms?”
A refinance is NOT free!!! Just because you are not paying any money directly out of pocket on the day of closing it does not mean you got a good deal! Most lenders roll closing costs into the loan, so remember your loan balance is increasing and there is no such thing as a free refinance. Make sure you shop around for the best rate and affordable closing costs.
Is your lender showing you the total interest cost and pay off time of your new loan as compared to your current loan? If not…find a lender who offers this to you UPFRONT. You should always look at the total cost of what you are doing to determine if it is a smart financial move.
Compliments of Debbie Sheets, Mortgage Consultant