How Soon After Home Purchase Should I Refinance?
Other People Are Reading
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Refinancing Can Be Expensive
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The cost of refinancing your home loan can include bank closing costs, new appraisals and inspection fees, legal fees, application fees and other ancillary expenses. It can be an expensive investment to refinance so soon after your original loan closes. Bankrate.com's 2008 survey says the national average for closing costs to refinance a $200,000 loan were #3,118.
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A Much Better Loan Rate Might Be Worth It
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Whether it is one month after purchase, one year, or longer, you can find effective refinance calculator tools to make a calculated decision about refinancing. If rates drop dramatically in the month after purchase and your monthly payments would be much lower, the expense of refinancing may be justified.
Bottom Line
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You must work with your bank and use available tools to decide whether refinancing is right for you. Do not rule it out simply because you purchased your home only a short time ago. However, be sure the interest savings and lower payments will save you more than expenses you'll pay to refinance.
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