When is Refinancing Worth it?
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Shopping for a mortgage loan? We can assist you! Call us at 5852820960. Ready to begin? Apply Now.
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Some have said that only in the case your new interest is at least 2 points under your current rate, should you refinance your mortgage. That may have been valid a while back, but with refinancing dropping in cost recently, it's a good time to explore the options of a new loan! Refinancing your loan has some advantages that will often make it worth the up-front cost a few times over.
Advantages
When you refinance, you could be able to reduce your interest rate and monthly mortgage payment amount, sometimes considerably. Additionally, you may have the option of tapping into the equity in your home by "cashing out" some funds to remodel your home, consolidate debt, or plan a special vacation. With lower interest rates, you might also get the chance to build your home equity more quickly by switching to a shorter-term mortgage loan.
The Cost
All these benefits do come with some expense, though. You'll pay the same types of fees as you did with your existing home loan. Included in the list might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
You might look into paying points to be given a lower interest rate. Your savings over the life of the mortgage loan could be substantial if you've paid up front about three percent of the new loan balance. Please consult a tax professional before acting on rumors that the points paid may be deducted on your taxes.
One more expense that borrowers might take into account is that a reduced rate of interest will reduce the interest amount you'll be able to deduct on your taxes. Call us at 5852820960 to help you do the math.
All things considered, for most borrowers the total of initial costs to refinance will be paid back very quickly in savings each month. We will help you find out what mortgage program is best for you, taking into account your cash on hand, how likely you are to sell your residence in the near future, and how refinancing will effect your taxes. Call us at 5852820960 to get started.
Want to know more about refinancing your home? Give us a call at 5852820960.