ere’s how to tell if refinancing makes good financial sense.
With mortgage rates at record lows, refinancing your mortgage right now might seem like a no-brainer. And for millions of American homebuyers, that certainly may be the case — in fact, I’m currently shopping around for a refinancing loan for my own home.
However, there’s more to consider when it comes to refinancing than just the interest rate you can get on a refinancing loan. Here’s an overview of how to tell if refinancing could be worth it for you, as well as some of the other factors you should consider before filling out an application.
Is refinancing worth it? The 30-second calculation
The key point to know before you start the mortgage refinancing process is that refinancing isn’t free. Lenders charge origination fees when you want to refinance, and there are also several other common types of closing costs like title insurance, appraisal fees, and credit report fees. These can vary dramatically: The cheapest option I found in my recent refinancing application came to about $1,600 to close.