Is Refinancing Worth the Cost?
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Shopping for a mortgage? We'll be glad to discuss our many mortgage solutions! Call us at 3217777277. Ready to begin? Apply Now.
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Have you ever heard the old rule of thumb that says you should only consider refinancing if the new interest rate will be at least two points below your existing rate? Maybe several years ago that was wise advice, but as refinance costs have been falling recently, it could be a good time to look into it. Refinancing has some advantages that will often make it worth the up-front expenditure a few times over.
Advantages
When you refinance, you might be able to lower the interest rate and monthly mortgage payment , sometimes considerably. Additionally, you could have the option of tapping into the equity in your property by "cashing out" some money to remodel your home, consolidate debt, or plan a special vacation. You might have the option to refinance into a shorter-term mortgage program, giving you the ability to build up your equity quicker.
Fees and Expenses
All these advantages do come with some expense, though. You'll be charged the same types of expenses and fees as with your existing home loan. These might include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and so on.
Doing the Math
Paying points can help you get a better interest rate. Your savings over the life of the loan could be significant if you have paid up front about 3% of the new loan total. You might be told that the points can be deducted on your income taxes, but because tax regulations are difficult to keep up with, please consult with your tax professional before making decisions based on this.
Another thing about taxes is that once you bring down your interest rate, it follows that you will also be lowering the paid interest amount that you will be able to deduct on your taxes. This is one more expense that borrowers take into consideration. We can help you do the math! Call us at 3217777277.
Most borrowers find that the monthly savings quickly balance out the initial expenses of a refinance. We can help you explore your options, considering the effect a refinance could have on your taxes, how likely you might be to sell in the near future, and your cash on hand. Call us at 3217777277 to get started.
Curious about refinancing your home? Give us a call: 3217777277.