The most important consideration, when refinancing your home, even more than lowering your interest rate, is knowing when you’ve gotten to the point where you are starting to save the money that you were expecting to save when refinancing. This is also known as your “break-even point.” The greater the gap between your old rate and your new rate, the shorter the break-even point will be.
Additionally, when obtaining your mortgage, be careful that you aren’t paying any unsubstantiated or unnecessary fees and costs; this will also save you money in the long run.
Lead generation sites are just what that says: they generate leads of people looking for a mortgage and sell them to mortgage companies. Often, in the process of doing this, they hang onto your personal (and sometimes financial!) information and usually sell it — over and over — to other marketing companies. Be very careful when signing up for mortgage services online for this very reason.
As an example, using round numbers for simplicity, if you refinance a $200,000 mortgage which costs you $6,000 in origination fees and costs. Your new payment is $1,581.58 per month for 15 years (at 5%). Your savings from your older payment are $160.63 per month; so in 37 months (just over three years) you will have recouped your costs and begin saving money.
Searching online is a good way to not overlook a great deal when getting a mortgage or a refinance; just be careful that you aren’t giving out your information needlessly to a third-party non-mortgage marketing firm.
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