Having your mortgage refinanced can help you save money on monthly payments, but don’t forget about the closing costs. These costs, which include processing and appraisal fees, can be in the thousands. If you would rather avoid this added cost, there are no closing cost options to consider.
These costs have advantages and disadvantages to consider, including the following:
- The main advantage is that you won’t have to pay for the closing costs, which can lead to a lower monthly bill. You’re better off choosing one of these options if you plan on selling your home within five years or doing costly renovations to it. It’s also a good option if you think you’ll be refinancing again in the near future.
- One disadvantage of no closing cost options is that you could end up with a higher interest rate on your refinance, which can bump up your monthly bill a bit. You won’t have to worry about having thousands added on to your mortgage from closing costs, but you might have a considerable amount added on from the added interest.
- Another drawback to having no closing costs is that you could end up paying more money than you thought if you’ll be staying in your home for more than five years. That’s because you’ll be paying that higher interest rate for a longer period of time, which can add up significantly over the years.
An ERA real estate agent can give you additional advice on your refinancing options. This can help ensure that you choose the best option for your situation.
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