When is Refinancing Worth it?
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Some have said that only if your new interest will be at least 2 points lower, should you refinance your loan. Maybe several years ago that was wise advice, but as refinance costs have been getting lower, it may be time to look into it. Refinancing your mortgage loan has various advantages that can make it worth the initial cost a few times over.
Benefits from Refinancing
When you refinance, you may have the ability to lower the interest rate and mortgage payment amount, perhaps by a lot. You might also have the ability to "cash out" some of your equity, which you will be able use to take care of higher interest debts, add on to your home, or take a vacation. You could have the option to refinance into a shorter-term mortgage program, giving you the ability to build your home equity quicker.
Of course, you'll have to pay for your the refinance process. When you refinance, you are paying for a lot of the same things you paid for when you got your existing mortgage loan. Included in the list might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
You might consider paying points to reduce your interest rate. If you pay (on average) 3% of the mortgage loan amount up front, the savings for the term of the new mortgage loan can be substantial. Please consult a tax professional before acting on advice that any points paid can be deducted on your taxes.
Speaking of taxes, if your interest rate is lowered, naturally you'll also be reducing the paid interest amount that you can deduct on your taxes. This is another expense that borrowers take into consideration. We can help you do the math! Call us at (321) 777-7277.
Most people find that the monthly savings outweigh the up-front cost of a refinance. We can help you find out your options, considering the effect a refinance could have on your taxes, how likely you may be to sell in the next couple of years, and your available cash. Call us at (321) 777-7277 to get you started.
Curious about refinancing your home? Give us a call: (321) 777-7277.