Just because a lender offers you a new mortgage with a lower interest rate doesn't mean that's the best deal overall. In order to determine that, you'll need to add up all the legal and lender fees associated with the refinance."A simple formula can be employed to determine if these expenses are worthwhile," saysand founder of Buy Yo Dirt."To begin, deduct your existing monthly payment from your new estimated monthly payment.
This number shows how many months you'll have to live in the house to break even on your refinancing fees. If you don't plan to stay that long, you'll likely want to continue with your original loan.The worst thing you can do when refinancing your mortgage is to pretend you already know all the answers."The only thing I implore all homeowners to do before refinancing their home is to understand there are no stupid questions," says.
By creating an open dialogue with your lender, you can rest easy knowing you're aware of all the fine print in your new mortgage. That way, you can reap the full benefits of a refinanced loan, with none of the stress.
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