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The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: fizkes/Shutterstock July 16, 2021 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Miranda Marquit is a contributing writer for Bankrate. Miranda writes about topics related to investing, saving and homebuying. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Chloe Moore, CFP, is the founder of Financial Staples, a virtual, fee-only financial planning firm based in Atlanta and serving clients nationwide. Bankrate logo The Bankrate promise
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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. When you , you rarely need to make a down payment like you did when you obtained the initial loan. However, there are still costs involved in refinancing, so you may need to provide cash when you close. How much largely depends on the type of refinance. Do you need to put money down to refinance a mortgage
More often than not, you don’t need to put down money to refinance your mortgage. In the typical rate-and-term refinance, which lowers your interest rate and payments and/or shortens your loan term, lenders generally look for an 80 percent (LTV) or lower and solid credit, not money down. If your LTV isn’t in line with that threshold, however, you may be considering a cash-in refinance, which does involve bringing money to the table. The extra funds in a cash-in refinance can help you lower your monthly payments if you’re shortening the term, get a lower interest rate or bring your LTV to the point where you can get rid of (PMI). Sometimes, putting money down can help you save more in the long run. For a cash-out refinance, on the other hand, there is no down payment requirement. Generally, lenders limit the amount you can cash out to 80 percent of the . How much does it cost to refinance
While in most cases putting money down isn’t necessary, refinancing does come with . The average closing costs to refinance total $5,000, according to Freddie Mac, and can include: Appraisal fee Loan origination fee Credit report fee Survey fee (if needed for property boundaries) Title search and insurance It’s possible to have some of these costs waived or have them rolled into your loan in a in order to avoid paying the costs upfront. The disadvantage to a no-closing-cost refinance is that you’ll pay interest on a higher loan amount and can end up paying much more over time as a result. If you won’t be in the home very long, however, a no-closing-cost refinance can be a good choice. You can also try . If you’ve had a loan with the lender in the past or are otherwise a customer in good standing, you might be able to persuade the lender to waive some of the costs. Additionally, there are some costs, like the appraisal or survey, that may not need to be performed if you’ve had them completed recently. However you choose to pay for closing costs, be sure to consider the point when you’ll break-even to determine whether the cost is worth the savings you’ll realize. You can use Bankrate’s to see how many months it’ll take to recoup the closing costs. If you don’t plan to stay in your home for a long time, paying to refinance might not be worth it. How to get the lowest refinance rate
Another way to reduce the is to get the lowest possible rate. Refinance rates are already near historic lows, but there are other steps you can take to ensure the best rate. Improve your credit score. Take action to make on-time payments and reduce your credit utilization to improve your credit score. Also, review your credit report for errors and have any fixed as soon as possible. Pay points. Depending on your situation and timeline, it might make sense to pay discount points. Generally, each point you pay reduces your mortgage rate by 0.25 percent, and one point costs 1 percent of the amount of the loan. So, if the mortgage rate on a $150,000 refinance would normally be 3 percent, paying one point could reduce it to 2.75 percent, at a cost of $1,500 upfront. Shop around. One of the best things you can do to reduce your mortgage rate is to shop around. You can compare multiple lenders online to find the best deal, and then factor in any fees and closing costs. With rates low, refinancing can be worth the cost for many homeowners. It’s important to run the numbers to see what your costs are, and then consider how long you’ll be in the home, as well as how long it will take you to break even. Bankrate’s can help you compare different scenarios and decide what will work best for you. Learn more
SHARE: Miranda Marquit is a contributing writer for Bankrate. Miranda writes about topics related to investing, saving and homebuying. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Chloe Moore, CFP, is the founder of Financial Staples, a virtual, fee-only financial planning firm based in Atlanta and serving clients nationwide. Related Articles