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Your Location: Home - Mortgage Loan Mortgage LoanUse: mortgage calculator, mortgage rate, mortgage loan, mortgage interest rate, home mortgage, refinance mortgage, mortgage company, second mortgage, online mortgage application.
Mortgage Refinance Questions and AnswersQ. When should I refinance my current mortgage loan? A . It is often said that you should refinance when mortgage rates are 2% lower than the rate you currently have on your loan. Refinancing may be a viable option even if the interest rate difference is less than 2%. A modest reduction in the loan rate can still trim your monthly payment. For example, the monthly payment (excluding taxes & insurance) would be about $770 on a $100,000 loan at 8.5%. If the rate were lowered to 7.5%, the monthly payment would be about $700, a savings of $70. The significance of such savings in any scenario will depend on your income, budget, loan amount and the change in interest rate. Your trusted lender can help calculate the different scenarios. To find a lender offering lower rates and fees and shop low interest rates go to LoanWeb Q. Should I refinance if I plan on moving soon? A . Most lenders will charge fees to refinance a loan. If you plan to stay in the property for less than a couple of years, your monthly savings may not get a chance to accumulate and recoup these costs. Let's say a lender charged $1,000 to refinance your loan, but it resulted in a monthly savings of $50. It would take 20 months (1,000 divided 50) to recoup the initial costs before you start to realize some savings. Some lenders will charge a slightly higher than average interest rate on refinance loans, but waive all costs associated with the loan. The attractiveness of these loans will depend on the interest rate you are being charged on your current loan. To shop low rates and fees use the online lending marketplace at Shop low interest rates at LoanWeb Q. How much will it cost me to refinance my current home loan? A. In addition to an application fee, you will likely have to pay an origination fee (typically 1% of the loan amount). In many cases you will have to pay much of the same costs that you had to pay with your current home loan (title search, title insurance, misc. lender fees, etc.). The sum of these fees could cost you up to 2-3% of the loan amount. If don't have the money to pay for associated loan costs, look for lenders that offer 'no-cost' loans. These loans will charge a slightly higher interest rate, so ask a lender if it would still make sense to refinance using this type of program.
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