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Posted on Nov 20, 2020

Community Mortgage

Recouping Your Refinancing Costs and Fees in San Diego

When you’re thinking about refinancing your home, there’s more to it than the interest rate. There are closing costs to consider which can be steep and could be as high as 5% of the loan principal. So if you’re buying a $200K home, you’d be looking at $10K in closing costs. There’s also a new refinancing fee that goes into effect on Dec.1, 2020 if your refinancing more than $125K. This will add an extra 0.5% of the principal balance to the closing costs. However, it doesn’t apply to FHA or VA loans.

However, you may not have to pay everything up front as some lenders will allow you to add the closing costs to the principal and include them in your loan financing. So if you want to determine if refinancing is right for you, calculate the length of time that will be required for it to pay for itself. If you’re planning on selling your home before reaching a break-even point, refinancing may not be the right choice. To calculate your break-even point, divide the total closing costs by your monthly savings. You should be saving this much in interest payments if keeping the loan for the duration.

Community Mortgage
814 Morena Blvd #310
San Diego, CA 92110
(619) 692-3630
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