What is the cost to refinance your mortgage and when does it make sense?

Lots of lenders will tell you there is no out of pocket costs to refinancing. They hope you hear no costs. The truth is, these lenders are rolling the closing costs into the term of the mortgage. Those costs are real, and you have to repay them.

Sometimes the net savings is worth it. Sometimes, your cash out helps you pay down other debts and saves you money in the long run. However, these "hurry up and refinance companies" with names that suggest speed will never take the time to ask the right questions to make sure refinancing is right for you.

The decision to refinance is derived from one straightforward question. Will you save enough money to offset the cost of the refinance? 



To calculate that answer, you need to ask yourself.

• How many months makes sense on a refinance to recuperate your costs?
• Will you recuperate in 18 months?
• Are you doing a rate term only or cash out?
• Are there two mortgages on the property?

Each situation is unique, so professional advice is a must in making this decision.

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