February 10th, 2020 10:27 AM by Jackie A. Graves, President
If refinancing your home is on your to-do list, 2020 may be a
good year to make it happen. According to our recent forecast, average mortgage
rates are expected to remain below 4% for the year – providing you with a nice
opportunity to refinance and benefit financially.
The trifecta of interest-rate cuts in 2019 boded well for
homeowners looking to refinance. In fact, according to our recent Housing &
Economic Research forecast, refinancing made up 40% of mortgage
originations last year, up from the previous year.
But, is it right for you?
Just because rates have dropped doesn't mean it necessarily
makes financial sense to refinance. The average cost to refinance is almost $5,000
and careful consideration needs to be made, such as how long you plan to stay
in the home, for savings to outweigh the costs.
For the most part, the costs are very similar to what you paid
when you purchased your home, including your loan origination fee. There are
required services involved as well as state and local fees (which can vary
significantly based on where you live) and you can expect to pay for:
Government recording costs
Credit report fees
Lender origination fees
Tax service fees
As with any big financial endeavor, you'll want to do your
homework, look carefully at your short- and long-term goals and work closely
with your lender to do a cost-benefit analysis.
Be sure to check out our calculators to quickly determine if refinancing makes sense for you and visit My Home by Freddie
Mac® for all of the
tools and resources you need.
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