Refinance or Not
The interest rate banks and other institutions charge their best customers hasn't been this low since the '50s.
What should you consider?
1. Prepayment penalty
Most of the fixed-rate mortgages and equipment leases have this penalty. But anyway, you don't have to be dissapointed because the fee that is actually a percentage of the outstanding loan reduces each year.
Always try to negotiate with your bank about the costs tied with refinancing. There's a big possibility that you will end up with better conditions because they know how responsible you are with your payments and also know your stable income. To keep you as their client, they can even reduce your closing or other costs associated with refinancing.
2. Closing costs
Closing costs are fees charged for services that must be performed to process and close your loan. Your bank or other lender is required by law to inform you in writing what the estimated mortgage closing costs will be. This is called the Good Faith Estimate. You can expect your closing costs from $2,500 to $5,000 or about 6% of your loan but this amount changes. A lot of people think that all closing costs go to the lender.
What should you consider?
1. Prepayment penalty
Most of the fixed-rate mortgages and equipment leases have this penalty. But anyway, you don't have to be dissapointed because the fee that is actually a percentage of the outstanding loan reduces each year.
Always try to negotiate with your bank about the costs tied with refinancing. There's a big possibility that you will end up with better conditions because they know how responsible you are with your payments and also know your stable income. To keep you as their client, they can even reduce your closing or other costs associated with refinancing.
2. Closing costs
Closing costs are fees charged for services that must be performed to process and close your loan. Your bank or other lender is required by law to inform you in writing what the estimated mortgage closing costs will be. This is called the Good Faith Estimate. You can expect your closing costs from $2,500 to $5,000 or about 6% of your loan but this amount changes. A lot of people think that all closing costs go to the lender.
