By: Jack Erdos, Attorney And Cpa
With attractively low interest rates still holding, now is as good a time as any for Americans to refinance their mortgages. Today, typical fixed rate loans for a 30-year term under $400,000 are about 4.50 to 5.00 percent. Here are a few tips to help those considering a REFI:
- First, find out about any large upfront costs, such as “points” and closing costs. Often, you can find a great rate without points (a point is 1 percent of your loan amount).
- Secondly, for a mortgage in New York, obtain an “assignment” of the existing mortgage to save on New York’s mortgage tax, which is over 2 percent of your loan amount. This is a great cost saver. When you get an assignment of your old loan, you pay the mortgage tax only on the “new money,” or the difference between your new loan and the old loan.
- Thirdly, with credit requirements tightening, now more than ever it is crucial to consult with a qualified attorney who will guide you through the REFI process and help you avoid pitfalls.
- Lastly, shop around. Each bank offers different programs and rates and requirements can also vary widely among institutions.