Refinancing your mortgage may seem like a great opportunity in this market, but it could be the wrong choice for you, even if it ends up lowering your monthly payments. There are certain fees and such that you need to be aware of before you take the plunge. Take a look at a couple that Wise Bread points out:

Refinancing Can Stretch Out Your Loan Terms

Since you’re basically getting a new loan when you refinance, you’re essentially stretching out your payments for however long you were into your last mortgage. For example, if you are 3 years into your 30-year fixed rate loan, you have 27 years of payments left. But if you refinance 3 years in to a new 30-year loan, you’re stretching out your loan payments another 3 years. That might be just what you’re looking to do, but just be aware of the new terms before you commit.

There Are Fees When You Refinance

This may not show up in your documents, but every borrower pays a fee to obtain a new loan. Don’t listen to any of the mortgage myths that are out there that claim otherwise. After all, the money used to pay the loan officer has to come from somewhere. Sometimes the fees are wrapped into the entire loan, so you end up with a bigger loan amount. Other times, you are paying for it using a higher loan rate. Whatever the case, there is a cost with the new mortgage. When you work out the specifics of whether refinancing your home loan makes sense, make sure you are considering all fees involved.

To read about the third hidden fee you may encounter, check out Wise Bread’s 3 Hidden Dangers of Refinancing Your Mortgage.