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
- Appraisal fees
- Credit report fees
- Lender origination fees
- Title services
- Tax service fees
- Survey fees
- Attorney fees
- Underwriting 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.