Indianapolis, IN, Office: 317-849-4663  Email:mcnultyre@aol.com

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Dear Friends

I hope your year is going well. Personally, it has been fun returning to the real estate business and helping people, such as yourself, with their individual real estate needs. Please do not hesitate to call as these arise, and your referrals are always appreciated, too. I hope you find the following real estate tip useful.

This is a question I am currently being asked quite a bit. No wonder in these times of declining interest rates! The answer is easy to determine.

There are fees associated with refinancing your note and mortgage. The lender you choose will have fees for a credit report, an appraisal of the property, document preparation, processing, underwriting, messenger service, potential points of the loan (a point is one percent of the mortgage amount), and so on. Not all of these fees are the same for each lender, or the cost they charge for them. There will also be other charges for title insurance, mortgage release fees, recording fees, and a closing fee.

Remember two things. First, the lender should disclose all these fees to before you choose to use them. They do this with a Good Faith Estimate. Secondly, you can choose the title insurance company of your own liking. This is not the lender's right and some offer better discounts on your previous title work than others.

Once you have all of your up front costs, the question is easy to answer. You simply take the amount of your current payment minus the amount of your new payment and divide this into your up-front costs. This will give you the amount of months it will take you to pay off these costs before you start saving money. If you are going to live in the property longer than this number of months, then it makes sense to refinance.

Cost to Refinance divided by (Old payment - New Payment) = Number of Months Before You Start Saving Money.

Just like with any of your other real estate needs, give me a call if you are thinking about refinancing. I can tell you what to watch for and refer you to competitive and competent lenders and title insurance vendors. I would be more than happy to help!

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