Category: Home Improvement

How Much Does It Cost to Refinance?

by Phillip Warren

For millions of American homeowners, their mortgage payment is one of their greatest financial commitments. With mortgage rates hitting record lows this year, it’s no wonder that people are interested in the possibility of refinancing their homes.

Instead of only focusing on the potential of saving hundreds per month, it’s essential to fully understand how much it costs to refinance. We wanted to outline the basics so you have a strong starting point in your refinancing decision-making process.

How Much Does It Cost to Refinance a Mortgage?

Mortgage refinancing is defined as replacing your existing mortgage with a new one. There are multiple types of mortgage financing loans that require different considerations, such as cash-out refinances. In any case, working with your mortgage lender is essential to figure out if refinancing will be worth it for you.

Below, we’ve listed the main types of fees you can expect when refinancing your mortgage. Depending on the situation, you could expect to pay anywhere from $5,000 to $10,000 in fees upfront.

The cost of each fee varies greatly based on the type, size, and location of your home. You’ll also have to factor in your credit score and other aspects of your personal financial profile. Also, refinancing fees vary between states and lenders.

 

Refinancing Closing Costs
Type of fee Estimated cost
Loan origination fee 0.5% – 1% of loan amount
Appraisal fee $300 – $400
Credit report fee $30 – $50
Title insurance fee $500 – $1,000
Government recording fee $30 – $50
Property survey cost $300 – $800
Home inspection cost $300 – $600
Flood certification cost $15 – $20
Prepaid Interest Charges Varies based on the interest rate and when your loan closes
Tax service cost Varies
Attorney cost Varies
Mortgage points One point costs 1% of your mortgage amount
Loan reconveyance fee $50 – $65

 

By doing a cost-benefit analysis with your lender, you’ll determine if the short-term financial burden of refinancing is feasible. As with any financial endeavor, you’ll need to do your due diligence.

It’s worth noting that some refinancing costs are tax-deductible based on certain criteria. For example, you can usually receive tax deductions on mortgage interest and closing costs.

Questions to Ask Yourself Before Refinancing

Before you make your decision, examine your long-term goals to see if you can justify the cost to refinance a mortgage. Ask yourself key questions about how much you’ll actually benefit from refinancing your loan or not.

 

How-Much-Does-It-Cost-to-Refinance-1

 

1) Will the Investment Pay for Itself?

Ask yourself how long it will take you to earn back the cost of refinancing your home. Consider your ability to break even in a timely fashion. For example, it makes sense if you’re planning on staying in your home for the long haul and you can break even in a few years. If you might move in a year or two anyway, maybe you should reconsider refinancing.

2) Is Your Loan Seasoned?

Your loan is considered seasoned when it’s been out for at least a year and the borrower has a reliable payment history. If you’re five to ten years into paying off a 30-year mortgage, refinancing might not actually benefit you.

For example, if you’re losing your potential savings to additional interest costs, you’ll likely just lose more by refinancing. On the other hand, refinancing could be a great option if you can ensure you won’t be losing money to interest fees.

3) How Can I Lower my Refinancing Costs?

Focus on improving your credit score and debt-to-income ratio before refinancing your mortgage. You’ll be in a strong position for negotiation to get the best possible rate. It’s worth asking if you can waive the appraisal fee, which could save you hundreds.

If a property has been appraised fairly recently and prices have not significantly changed, your mortgage lender might be able to waive a new appraisal. Also, don’t hesitate to comparison shop to find discounted third-party fees.

 

How-Much-Does-It-Cost-to-Refinance-2

 

Will Refinancing Affect My Credit?

Refinancing a mortgage has the potential to impact your credit score, although not permanently. If refinancing makes sense for your situation, you shouldn’t be concerned about it hurting your credit in the long term. It might not be the most ideal situation, but it’s extremely common and typically relatively easy for your credit score to bounce back.

By consolidating your credit inquiries, you’ll prevent multiple hard inquiries from raising red flags. Also, you can work with your lenders to avoid having them all run your credit, which could risk lowering your credit score.

From a long-term financial planning standpoint, home refinancing can be a smart move. Even if you’re considering refinancing your car loan, it makes sense to look into refinancing your house first. After all, a mortgage refinance allows you to benefit from more cash in your pocket due to lower monthly payments.

Since financing decreases your monthly bills, you’ll want to be strategic about where you direct your additional funds. Are you saving for college tuition, a wedding, or retirement? Are you working towards becoming debt-free? Refinancing is a great time to get serious about budgeting and prioritizing your personal financial goals.

 

Sources:

Federal Reserve | Interest.com | The Nest | My Mortgage Insider | Freddie Mac

The post How Much Does It Cost to Refinance? appeared first on MintLife Blog.


Source: mint.intuit.com

‘Fixer to Fabulous’ Reveals Where a Home Office Could Be Hiding in Your Home

by Phillip Warren
fixer to fabulousHGTV

Jenny and Dave Marrs of “Fixer to Fabulous” are always busy making over other people’s homes, but in the latest episode, they get personal—turning their efforts toward renovating their own rental property.

In the Season 2 episode “Boring Turns Into Boho-Chic,” Dave and Jenny learn that their friends J’Aaron Merchant and Jasmine Hudson are moving from New Jersey back to northwest Arkansas. The Marrses decide to fix up their rental property so Hudson and Merchant can move in.

The problem: This rental needs a lot of work, and with only $95,000 and four weeks to finish the project, it’s going to take a ton of clever solutions to get this home fixed up in time.

To make things worse, Jenny and Dave run into issues when they have to decide whether to renovate the house to their renters’ boho tastes (in the hope of encouraging them to stay for a long time) or to give it a more classic look to try to appeal to other renters in the future.

Read on to learn how the Marrses renovate their rental property, and learn how to create a great space for any guest, no matter how long or short their stay.

No cash for real terrazzo? Make your own

house
White paint and new windows make a big difference to this house.

HGTV

The Marrses are determined to polish up the first impression of this home, so they refresh the exterior with white paint and new windows.

These improvements make the house look fantastic, but when it’s time to work on the front walkway, they aren’t sure what to do. Jenny wants to install a terrazzo walkway, but knows they don’t have the budget for such a pricey material.

walkway
This homemade terrazzo makes for a great walkway.

HGTV

So they decide to craft their own makeshift terrazzo out of spare pieces of marble.

“We’re gonna take this marble, break it into teeny little pieces, then put it in concrete to create terrazzo steps,” Jenny says.

The terrazzo look-alike has tons of character and gives a unique look to the front of the house.

Lose the closet to make room for a bar

bar
This bar area is a fun and funky way to be welcomed home.

HGTV

Jenny knows that this home’s entrance is disappointing. The front door opens right into a small coat closet—and while a closet may be functional, it doesn’t give guests that “Wow!” factor.

Instead, she comes up with an idea to turn this closet into an arched minibar area where they can display pretty drinkware on open shelving, while a cabinet below provides useful storage.

“It’s a built-in that’s functional and really pretty,” she says.

Dave builds the bar area, and when it’s finished, it looks amazing. The wood shelves look perfect, and the beautiful blue-green cabinet really makes the feature stand out.

With a rental, it’s OK to take small risks for the sake of style

fireplace
Jenny usually loves brick, but she doesn’t think it’s the right look for this fireplace.

HGTV

Jenny wants to give this house a boho-chic look, starting with the fireplace.

“Imagine if the tile had a little bit of these blush tones in it,” she suggests.

Right away, Dave disapproves, objecting that it’s too risky. He feels the design should be a little safer, to ensure that future renters will enjoy the look as well.

fireplace
This pink fireplace was a risk, but it looks great!

HGTV

Still, Jenny decides to go for the blush tile, which is installed from floor to ceiling over the fireplace.

In the end, it looks great—the look is definitely boho and definitely feminine, but it’s not so wild that a future renter wouldn’t want to live in this space.

Try some flashy fabric at the breakfast bar

kitchen table
This boho kitchen table is a great addition to the kitchen.

HGTV

Jenny and Dave redo the kitchen with fun colors and a fresh, youthful feel, so when it comes time to design a breakfast table, they want the style to match. Jenny decides to add a fun, flashy fabric to give the space some sizzle.

“I want this dining nook to be a little bit different,” Jenny says. “I want the bench to have a cushion, and then I have a back bolster cushion as well.”

She chooses a blush material for the bolster pillow and a bolder, black-and-white pattern for the seat. It’s a great combo that makes this dining nook stand out.

Repurpose a garage as a workspace by adding a glass door

garage
This garage-turned-workspace is light and bright.

HGTV

Jenny knows that Hudson and Merchant both need workspaces at home. While they’re able to turn the third bedroom into an office for Merchant, they also need an art studio for Hudson.

So, Jenny gets an idea to turn the garage into a studio. It’s an easy swap, as long as she can change one feature: the garage door.

“We’re going to replace this garage door,” Jenny says, looking at the old, worn-out door. “Instead of replacing it with just a normal garage door, what if we replace it with a glass garage door, so that it lets in natural light and this becomes her studio?”

While a glass garage door can be expensive, Jenny and Dave spring for the update and are able to give Hudson a stunning studio.

It’s the perfect solution for anyone who needs a home office but who has assumed that the garage would be a no-go because of the lack of light.

The post ‘Fixer to Fabulous’ Reveals Where a Home Office Could Be Hiding in Your Home appeared first on Real Estate News & Insights | realtor.com®.


Source: realtor.com

Home Buyer Checklist: What to Look for in an Open House

by Phillip Warren

Open houses may be staged to look like a home decor dream, but don’t let that distract you from the real reason you’re there: to potentially buy a home. Make sure you can look past the neatly arranged furniture and focus solely on whether the house would be a good fit for you and your family. To help, here’s a home buyer’s checklist of things you might have missed at first glance.

Windows – Look specifically if they are facing the right direction to let sunlight in, and whether they open to a nice view (versus directly toward another neighbor’s window).

Under the Sink Cabinets – Check for possible signs of water damage due to leaky plumbing.

Electrical Outlets – Make sure there are enough outlets for the appliances and other electronics you’ll be using. If not, you can decide if that’s a renovation you’d like to make.

Storage Space – Don’t just look to see if there’s enough closet space, but look for closet placement. Also check that the storage is in a convenient location.

Appliances – If they’re included in the house, make sure they’re in good condition. They should be on and working while you’re there.

Under the Rugs – Lift up any rugs to check the condition of the floor underneath.

Floor Level – Check to see if the floors are level. Place a marble or another small, round object on the floor and see if it rolls consistently in one direction.

Attic – If the house has one, make sure it’s well insulated.

Water Spouts – Runoff from the gutters should be pointed away from the house, so take a step outside to see if this is the case.

This list isn’t all-inclusive, but it’s a good place to start. Talk to a CENTURY 21 ® agent to see what else he or she might add.

The post Home Buyer Checklist: What to Look for in an Open House first appeared on Century 21®.


Source: century21.com