Is Refinancing Worth the Cost?
 |
 |
 |
Looking for a loan? We'd be thrilled to discuss our many mortgage solutions! Give us a call today at 3217777277. Ready to get started? Apply Here.
|
|
|
|
|
Ever hear the pearl of wisdom that says you should only consider refinancing if your new interest rate is at least 2 points below your current one? Perhaps that was good advice several years ago, but as refinance costs have been falling recently, it may be a good time to look into it. A refinanced mortgage is often worth its cost many times over, factoring in the advantages that it brings, as well as a reduced interest rate.
Advantages
When you refinance, you might be able to lower the interest rate and monthly payment amount, perhaps by a lot. You may also have the option to "cash out" some of your equity, which you are able use to take care of higher interest debt, make home improvements, or plan a vacation. You might be able to refinance to a shorter-term mortgage, enabling you to build up your equity quicker.
Fees and Expenses
All of these advantages do come with some expense, though. When you refinance, you are paying for a lot of the same things you paid for at the time you got your original mortgage. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Doing the Math
You might look into paying points to reduce your interest rate. If you pay (on average) 3% of the loan amount initially, your savings for the life of the refinanced loan can be great. We recommend that you consult with a tax professional before acting on hear-say that the points paid can be deducted on your federal income taxes.
Speaking of taxes, when your interest rate is reduced, it follows that you will also be lowering the interest amount that you will be able to deduct on your taxes. This is another expense that borrowers take into consideration. Call us at 3217777277 to help you do the math.
Most people find that the savings per month balance out the initial cost of refinancing. We'll work with you to determine what loan program is perfect for you, considering your cash on hand, how likely you are to sell your house in the next few years, and what effect refinancing might have on your taxes. Call us at 3217777277 to get started.
Want to know more about refinancing your home? Call us at 3217777277.