Is Refinancing Worth the Cost?
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Shopping for a mortgage? We'd be thrilled to answer your questions about our mortgage offerings! Give us a call at 5852820960. Ready to begin? Apply Now.
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Some have said that only when your new interest will be at least 2 points lower, should you refinance your mortgage. Perhaps several years ago that was sage advice, but since refinance costs have been falling recently, it may be time to take a serious look. A refinance can be worth its cost many times over, because of the benefits that may come, in addition to a lower interest rate.
Benefits
When you refinance, you may be able to lower the interest rate and monthly payment , perhaps by a lot. You may also have the option to "cash out" a portion of the built-up equity in your home, that you may use to take care of higher interest debt, improve your home, or take a vacation. You might have the option to refinance into a shorter-term mortgage, giving you the ability to build your home equity faster.
The Cost
All of these benefits do cost something, though. When you refinance, you are paying for basically the same things you paid for when you obtained your current mortgage. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
Paying discount points can help you attain a lower interest rate. If you pay (on average) 3% of the loan amount at the start, the savings for the term of the new mortgage loan can be substantial. You may be told that the points can be tax deductible, but because tax regulations are difficult to keep up with, please consult with a tax professional before depending on this.
An additional cost that borrowers might consider is that a lower rate of interest will lower the interest amount you will be able to deduct from your taxes. We can help you do the math! Call us at 5852820960.
Ultimately, for most the amount of initial costs to refinance are paid back soon in savings each month. We'll help you determine what loan program is the right fit for you, taking into account your cash on hand, the likelihood of selling your house in the near future, and how refinancing may effect your taxes. Call us at 5852820960 to get started.
Curious about refinancing? Give us a call: 5852820960.