Many homeowners want to know if it worth taking a New York mortgage refinance. How do you know if New York refinance makes sense in your case? Read on to understand when you should refinance and how to go about doing it.
When you take up a New York mortgage refinance loan, you pay off the old mortgage and take up a new one. That means you pay similar costs such as discount points, settlement costs and other fees as in your old mortgage. The total cost of a New York mortgage refinance would depend on the interest rate, number of points, and other costs like appraisal and attorney's fees needed to get a loan.
Many mortgage lenders advertise lowest rates for New York mortgage refinancing. This is possible because the lender charges several points on the loan and the total cost comes to around 3 to 6 percent of the total amount you borrow. Other lenders may offer no points but higher interest rates. While this reduces the initial costs of the New York home loan refinance, the payments become higher.
The amount you save on a New York refinance depends on a number of factors like the total refinancing costs, whether you sell your home in the near future and the effects of mortgage refinancing in New York on your taxes. Do not take a New York mortgage refinance loan unless the refinance interest rate is at least 2 percent points less than the old mortgage. Some lenders in New York offer low cost refinancing options with no points. Such programs may help save a considerable amount.
At closing, you may be required to pay settlement costs. These costs may include loan application fees, title search, appraisal, loan origination, credit check, attorney's services, recordation fees or transfer taxes. Ask the lender for the complete list of charges that you need to pay while closing a New York mortgage refinance.
If you take up a low interest New York refinance, there will be less interest to deduct on your tax returns. This increases your tax payments and reduces the savings you may receive from a lower interest New York home loan refinance.
Some lenders in New York may require you to pay extra charges to cover the costs of loan application processing. You may have to pay this charge while filing the application. The lenders may not refund this charge if you decide not to take the loan or if you are not approved. Before taking a New York mortgage refinance loan, ask the lender if any application fee is charged, how much it costs and if it is refundable.
You need not apply for NY Home refinance with the same lender who provided your old mortgage. To keep their old customers, lenders may offer low interest rates with reduced closing costs. The APR or Annual Percentage Rate tells you the total costs of refinancing, which includes interest, points and other costs.