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Question by : How does refinancing a mortgage work?
I've seen that you can put down as low as 3% for a down payment on a home but I know it'll cost more for monthly mortgage payments this way. How does refinancing a mortgage work? Would someone be able to put down 3% and then later on refinance to a better interest rate?
Thanks!
Best answer:
Answer by godged
The only way this will work out is when you do not have to pay PMI.
What do you think? Answer below!
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{ 2 comments… read them below or add one }
With interest rate as low as it is now. No point of getting refinance later. Now it’s almost 5%. unless interest rate drop to about 3.5%, dont even bother to consider refinance. Refinancing is when you borrow a new loan to terminate your current loan. Fee to consider when refinancing, pre-payment penalty fee(from you current loan for not carrying out the full term of the loan), new loan application fee(usally 1-2% of the new loan amount), and of course some closing fees (small fee for lawyer and documentation).
Well you heard it right, but when you refinance for your mortgage it increases your interest rate by 0.2%, for more information you can visit: http://blog.badcreditwhiz.com/refinance-mortgage-rates/