Subscribe to usBeware The Hidden Costs of Refinancing
Published Date: 2005-09-19 14:16:34 WorkOnInternet.com


Read More on Investment & Financial StrategyWith so many homeowners refinancing, it is tempting to jump on the bandwagon, especially with the current low interest rates and appealing offers that are popping up all over the place. While in many situations refinancing can be a wise choice, it is important to note that it is not without its own costs.

Some refinance companies charge an application fee to begin the application and refinance process. This is an upfront cost that is never rolled into the new loan amount and must come out of your personal funds. There are lenders who do not charge application fees, and some of the lenders who do often run promotions where the application fee is waived.

You might remember when you bought your home and took out your mortgage, there were costs and fees involved that you had to pay. When you refinance, those same fees and costs must be paid all over again, though they can sometimes be rolled into the new mortgage. If you don’t think that you are paying for things like settlement costs and points, think again. Even if you don’t have to bring cash to closing, the lender has probably added these costs into the term of your loan. Be sure to check and see exactly how much they are charging you and how much money for these expenses is being rolled into your new mortgage balance. To have a lower monthly payment, you are going to wind up paying more points. To pay lower points you are going to need to make a higher monthly payment.

Another possible cost that you have to be aware of when you are considering refinancing is whether or not you have an early payoff penalty on your current mortgage. Sometimes these fees can be steep, making it pointless to refinance if the fees exceed the amount you will be saving by refinancing in the first place.

While there are costs involved with refinancing, in the majority of cases, it still pays off in the long run. Refinancing can save a homeowner tens of thousands of dollars - a rather large sum compared to the amount spent on refinancing.

Written by Glen Hooke

** Attn Ezine Editors / Site 0wners **
Feel free to reprint this article in its entirety in your ezine or on your site so long as you leave all links in place, do not modify the content and include our resource box as listed below.

Discover how you can get out of that 30 year mortgage, pay off your home in 10 years (or less) without refinancing or changing your mortgage? and build equity in your home ten times faster than you ever thought possible……
Visit: http://www.BeMortgageFreeSooner.com

Want to sell your home for more, (or buy your next home for less) without being trapped, taken advantage of, manipulated or ripped off by slick real estate agents……Visit: http://www.InsidersRealEstateSecrets.com

This article was published on WorkOnInternet.com
The URL for this article is : http://www.workoninternet.com/article_6113.html
The URL for the category of this article is : http://www.workoninternet.com/topic_15.html
Work On Internet : the small business and home business online resource center
List extensive information on building a successful small business or home business online by internet marketing.

Google
 
Web WorkOnInternet.com


Home | Submit Article| Article Topics | Article Archives | Newsletter | Business Directory | Contact US