Is it really sensible to refinance your mortgage? Under what conditions you may consider refinancing your mortgage? It would be easy for you to decide on this if you have a double digit interest rate or you find the interest rates have dropped or you have some financial burden to ease. If you don’t have these issues it would not be easy for you to decide whether you want a refinance or not. Checking out how much you will save if you refinance by comparing the rates would be the best way to decide whether you want a refinance or not. Figure out how much you will have to pay with your next loan including principal and interest, as well as the cost of points, closing costs title insurance and other expenses for the new mortgage, it should help you decide.
No closing cost mortgage loans are usually associated with refinancing mortgage loans. The closing cost usually include title and escrow fees, appraisal fees, lender fees, credit report fees and other miscellaneous expenses non-recurring over the period of the loan.
There are lenders who provide no fee mortgages where you do not have to pay any up-front fee, closing costs or points. But invariably such mortgage offers come with a higher interest rate. Opting for such mortgage refinancing would be sensible if you do not have long term plans with your property. That is, it will be beneficial only if you consider selling or refinancing within a couple of years. Yes, you may refinance even if you have already refinanced earlier, when you find that rates have come down.
If you want to avoid closing cost, it would be wise to check out, how much you will end up paying for refinanced loan, with the high rate of interest the lenders offer for ‘ no closing cost’ refinancing. If you end up spending more than you saved by avoiding the closing cost what really is the point in mortgage refinancing with no closing cost. You may very well find better loan offers with closing costs. If you find that for zero fees refinancing you will have lesser amount to pay even with higher interest rate then you may go to such lenders to refinance your loan.
Once you apply for no closing cost refinancing the rest of the procedure is same as any loan application. They may provide you with an agent, ask for your documents, and verify your social security number, credit score and also whether you have a steady income. Some lenders may not request for all the documents but in such cases you should have excellent credit score to supplement their confidence. These loans are much easier and faster to obtain if you have a clean credit. The usual loan refinancing process where all documents are necessary will require some time to complete the whole process.
So the best way to select your mortgage refinancing would be, to checkout the end result after consolidating all the cost and fees offered and comparing it with your present loan. Research the lenders before you decide on one. It is your money so take action intelligently. If all these calculations and rigmaroles are beyond you get some good financial advice and cherry pick your lender.