Refinancing

When does it make sense for you to refinance? How many months or years would you need to stay in the property to recoup your refi costs? Find out the formula.

Refinancing your home loan makes sense only if you are able to have a monetary or security based gain. There are a few basic things you need to know when analyzing the merits of a refinance.

First you need to know the exact numbers of your existing loan terms.

Some of these items are:

Current principal balance
Current interest rate
Original length of the loan (how many years to pay off)
Amount of the principal and interest payment

You can find this information on your coupon book on the first few pages or on your monthly statement sent out by your lender. If the information is not in either of these places, you can find it on the NOTE that you signed in escrow.

The next step would be to call me for the current interest rate at (918) 742-5715 (office) or my cell, (918) 798-1427.

You also need to know the exact amount of NON-RECURRING closing costs (costs that are incurred to refinance the loan.)

Included in these costs are:

Appraisal
Credit Report
Discount Points
Origination Fees
Processing
Underwriting
Document Preparation
Title Insurance
Escrow Fees
Notary
Recording
Courier
Statement or demand fees

RECURRING COSTS (are not included) and these are:

Interest (prepaid and accrued)
Property Taxes
Homeowners' Insurance
Mortgage Insurance
Any Impounds for the above recurring costs

The reason for not including the recurring costs is that these costs are not new. You would have to eventually pay for these even if you did not refinance.

Here is the formula: