Mortgage refinancing Reviewing the basics
Second, estimate the cost of the appraisal, lawyer fees, documentation preparation and filing fees, charges from the new and old lenders, and any other refinancing costs. Third, divide the total cost of the refinancing by the estimated monthly savings. This will tell you how many months it will take you to recoup the cost of the refinancing, referred to as the "break even" point of the refinance. Mortgage refinancing should be considered, if you plan to own the property beyond the break even point of the refinance. Mortgage holders whose adjustable rate mortgage will reset soon, may choose to refinance with a fixed rate mortgage, regardless of the break even point.