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Costs of Refinancing

Refinancing your mortgage might help you lower your interest rate, shorten your loan term, or turn equity into funds you need – but it comes with a cost. Closing costs, like your first mortgage, must be considered.

Why should you refinance your mortgage?

  • You can lower your monthly payment:- If you have a fixed-rate mortgage with a higher interest rate than the market, refinancing could help you save money on your monthly mortgage payment.
  • You can reduce the length of your loan:- You can refinance your 30-year mortgage to a 15-year loan to pay it off faster and at a lower total interest rate.
  • You can convert an adjustable-rate loan to a fixed-rate loan:- If you have an adjustable-rate mortgage, you may want to consider switching to a fixed-rate mortgage.
  • You can avoid paying for private mortgage insurance (PMI):- If the value of your property has increased and you now have 20% equity, refinancing is one option for removing PMI.
  • You can acquire money to help you achieve your goals:-If you have enough equity in your house and want to pay off credit card debt or make home upgrades, you can perform a cash-out refinance.

What fees must I pay while refinancing?

The following are some common refinance charges to inquire about:

  • Discharge fees fee paid to your present lender to pay off the previous loan in full and prepare the necessary papers.
  • Fees for applications:- The cost of submitting a new loan application.
  • Valuation fees:- A fee levied by the new institution to cover the cost of obtaining an up-to-date appraisal on the property being used as security.
  • Fees for land registration:-These are the fees for transferring your existing mortgage from your current lender to your new lender.
  • Lenders Mortgage Insurance (LMI):- If you have less than 20% equity in your home, your new lender may charge you lenders mortgage insurance (LMI).

Loans by Reliiance Financial Solutions

We all have different needs and requirements. Let our knowledge and experience help you get the most suitable financial solution for you. At Reliiance Financial Solutions, we work with you, for you.

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