Ok, I’m not sure who might have some input on this question so it’s a free-for-all!
I swear that today I’ve received 5 unsolicited calls about refinancing my house. All from the same place, which appears to be my current mortgage company. In the past 6 months I’ve received emails and calls from other companies as well. I’ve got a fairly low interest rate plus I don’t plan on staying here so I didn’t worry about maybe saving $80 a month.
But now, I’m wondering. I know there would be stuff like closing costs, etc. Would I have to pay up front or would it be rolled over into the new mortgage? Another down payment or would that be included in the new mortgage? Would the new mortgage start the 30 years over (I don’t want to cash out; reducing the monthly payment would be the only thing)?
I seriously don’t think I would do it (even if I decide that this is my retirement home) and I don’t want to call the lender to ask; they’d probably start calling me every 30 minutes!!
You shouldn’t have to pay anything except minimal fee for paperwork. Eighty bucks a month adds up to $960 a year.
They typically roll over the closing cost into the new loan. No down payment needed, but they will want an appraisal to make sure you aren’t getting a loan for more than the house is worth. If you have 20% equity, then you don’t have to pay the PMI either. Personal mortgage insurance.
Yes your loan starts completely over. If you get a 30 year loan then the payments would be for 30 years. Sometimes people refinance to get a shorter term, but then the payment could go up.
If you’re planning on selling soon refinancing may not make sense. Since you’re starting over with a new loan the majority of your payment will be interest at first. And adding closing cost to the loan just means more to pay back. So less in your pocket when you sell.