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Refinance Considerations
What are your Savings
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Refinance Considerations
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Talk to a local mortgage professional to determine the available
rates and the costs associated with refinancing. These costs can
include items such as an appraisal and other various fees and points.
Then determine what your new payment would be if you refinanced.
You can estimate how long it will take to recover the costs of refinancing
by dividing your closing costs by the difference between your new
and old payments (your monthly savings). However, the ultimate amount
you may save depends on many factors, including your total refinancing
costs, whether you sell your home in the near future, and the effects
of refinancing on your taxes. The old rule of thumb used to be that
you shouldn't refinance unless the new interest rate is at least
two percentage points lower. However, many companies are now offering
zero point loans and low-cost refinancing. Therefore, even if your
rate change is less than one percentage point, you may be able to
save some money by refinancing.
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