When is Refinancing Worth it?
 |
 |
 |
Shopping for a mortgage loan? We will be glad to assist you! Call us at 5852820960. Want to get started? Apply Online Now.
|
|
|
|
|
Some have said that only when your new interest is at least two points lower, should you refinance your loan. Perhaps several years ago that was wise advice, but since refinance costs have been getting lower, it could be a good time to look into it. A refinance is often worth its cost many times over, because of the advantages that come, along with a reduced interest rate.
Benefits
You might be able to lower your interest rate (sometimes by a lot) and reduce your monthly payment amount with your refinanced loan. You could also be able to "cash out" some of your home equity, that you are able use to consolidate debt, make home improvements, or finance a vacation. You could have the option to refinance into a shorter-term mortgage, giving you the ability to add to your home equity quicker.
Expenses and Fees
All of these benefits do cost something, though. With your refinance, you're paying for basically the same things you paid for when you got your original mortgage. Included in your costs will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
Paying discount points can result in a lower interest rate. Your savings on the life of the mortgage loan may be significant if you have paid up front about three percent of the new loan total. You may hear that these points can be tax deductible, but as tax regulations can be difficult to keep up with, please consult your tax professional before depending on this.
Another expense that borrowers may consider is that a reduced rate of interest will reduce the interest amount you will be able to deduct on your taxes. We can help you do the math! Call us at 5852820960.
Ultimately, for most borrowers the amount of up-front costs to refinance are made up very quickly in monthly savings. We'll help you determine which mortgage program is best for you, looking at your cash on hand, how likely you are to sell your residence in the next few years, and what effect refinancing may have on your taxes. Call us at 5852820960 to get started.
Curious about refinancing your home? Call us at 5852820960.