Refinancing? Should You Pay Closing Costs?

There's a lot of hype out there about low interest rates. Mortgage rates have fallen to levels we haven't seen in years, and many are refinancing.

It's probably time to start asking your mortgage broker if now is the right time to refinance. You can get some estimates without having them run your credit, just so you have food for thought.

As you shop rates, you'll wonder whether or not you should pay higher closing costs or not. As with all things in life, there's a tradeoff. Lower closing costs generally mean higher rates (and monthly payments). While it may be easier to skip the closing costs today, you might end up paying more over the long term.

Mortgage News Daily recently featured an analysis of how the tradeoffs work, and why you might want to pay closing costs with today's low interest rates.

Further reading:

• Manage Your Closing Costs
• Calculate Mortgage Payments and Amortization