3 Common Questions about Refinancing
When mortgage rates drop, it may be the perfect time to refinance. Along with lower interest rates, we often see a surge in refinancing when a new school season is beginning. Therefore, we answered three common questions homeowners ask us about mortgage refinancing.
1. When and How Often Can you Refinance?
There is no specific time frame required for refinancing your home. However, it is not common to refinance soon after closing on your original mortgage. We advise our clients to refinance when mortgage rates have dropped and you can lower your monthly mortgage payment.
Technically, you can refinance your home as often as it makes financial sense. Although for a cash-out refinance, you must have equity built up in your home, so lenders typically require homeowners to wait at least six months. There may be other restrictions to refinancing your mortgage, so it is essential to always consult with your mortgage lender to see if it’s right for you. Mortgage lenders will advise homeowners to refinance their mortgage when there is a noticeable monthly saving.
2. How Much Does it Cost to Refinance?
When refinancing a mortgage, you will have to pay closing costs. Estimated closing costs can be about 2-4% of the loan amount and may include origination fees, appraisal fees, title and settlement fees, and mortgage recording taxes. All costs are discussed and disclosed during the closing process.
3. What Do I Need to Refinance my House?
Typically, a mortgage refinance requires similar documents as when purchasing. Some materials you may need, but are not limited to, include:
- Tax returns
- Bank statements
- List of assets and liabilities
Before you consider refinancing your mortgage, it is vital to outline and understand your financial goals. Get in touch to discuss your mortgage refinancing needs and goals.