Pandemic refinancing boom
How to know if now is the best time to refinance your home
TUCSON, Ariz. (KOLD News 13) -
One field that’s actually booming in the pandemic: home refinancing. It’s up more than 200 percent from last year, driven by rock-bottom low mortgage rates. But that doesn’t mean refinancing is a bargain for everyone.
Here’s what you have to consider when deciding whether to refinance in these strange times:
First, you may be able to get a lower monthly mortgage rate, but you need to weigh that against how far along you are in your current mortgage. Never forget - taking out a new 30-year mortgage means you start all over again on your home loan.
Next, calculate closing costs - usually between three and six percent of the amount of your new loan.
Figure out how much you’ll save each month by refinancing - then how many months you’ll need to recover those closing costs.
And - how long do you plan to stay in the house? If it’s a long time, a new loan may make sense.
If your current mortgage has a rate one percentage point than the current rate you’re considering, a refi may be for you. Find more information.
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