How to Calculate the Costs of Refinancing Your Home

Series Summary

Credit is the provision of resources by one party to another party in which the second party does not reimburse the first party immediately, thereby generating a debt and instead arranges either to repay or return those resources at a later date. The first party is called a creditor, also known as a lender, while the second party is called a debtor, also known as a borrower. Common forms of consumer credit include credit cards, store cards, motor finance, personal loans, retail loans and mortgages. In this free video series, a financial consultant provides advice on repairing credit, getting loans and refinancing. Discover how to borrow money quickly, how to refinance a car loan and how to improve a credit report. Learn about collection agencies, getting auto loans with no credit and problems with credit card balance transfers. With these financial planning tips, personal debt will no longer seem insurmountable.

Video Transcript

"Thinking about refinancing your home, and don't know your cost. Hi, I'm Carrie Kukuda the "some day coach". I'm here to calculate- give you an idea of how to calculate the cost of refinancing your home. What you'll need to do is a good faith estimate, and basically what that will cover, what it's going to cost you to refinance your home, the mortgage cost, the closing cost of the loan. They'll be some things that you'll see on there, they'll be an appraisal that they'll need, they'll be state fees, they'll be closing fees, recording fees, interest daily accumulated from the time it closes to the time that you actually make first payment, inspections, and there's some additional other fees. Typically that amount will be about 2 percent of what the loan amount is. So say you're at a hundred thousand, it may be two thousand for closing cost, it's typical, but it also can be waivered a little bit higher, depending if you pay points, points is something to buy down the rate on the loan, and it could be charged from 1 percent all the way up to 3, 4 percent. So you want to put those into consideration. Make sure that you're staying in your home longer. Again, we talk about that you want to be in your home 3 to 5 years to recoup those fees of doing the refinance and start saving. So just some ideas, as to definitely check with your mortgage consultant, have them do a good faith estimate for you, and see if the time frame fits, as whether you're going to stay in the home for those period of time, or it's not the right choice for you. Carrie Kakuda, thank you."