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5 Things to Know Before You Refinance

Chelsea Erickson - Forest Lake Homes For SaleThere’s no such thing as a free refinance. You’ll need to pay closing costs, which typically run anywhere from 2 to 5 percent of your loan amount. So, if you’re refinancing a $150,000 loan, you might pay between $3,000 and $7,500 in closing costs upfront. One option you have is for your mortgage lender to cover the closing costs using a no-closing cost refinance. But if you go that route, you’ll pay a slightly higher interest, says Ray Rodriguez, regional mortgage sales manager at TD Bank. Therefore, “you need to calculate your time horizon,” says Rodriguez. Before selecting a no-cost refinance, look at what the closing costs would be if you were paying for them separately, then calculate how long it would take the monthly payment savings from a refinance to repay the closing costs. – From Zillow

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