Is Refinancing Worth the Cost?
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Shopping for a mortgage loan? We can assist you! Call us at 3217777277. Ready to begin? Apply Now.
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Some have said that only when your new interest is at least two points below your current rate, should you refinance your loan. Perhaps several years ago that was sage advice, but as refinance costs have been getting lower, it could be time to take a serious look. Refinancing has a variety of benefits that will often make it worth the initial cost a few times over.
Advantages
You may be able to lower your interest rate (sometimes by a lot) and make smaller mortgage payments with your refinanced mortgage. You may also be able to "cash out" a portion of your equity, that you will be able use to consolidate debts, make home improvements, or plan a vacation. With lower rates, you might also be able to build up home equity more quickly by changing to a shorter term loan.
The Cost
Of course, you'll have to pay for the the refinance process. You will pay the same kinds of fees as you did with your present home loan. Included in the list will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Doing the Math
Paying discount points can help you get a lower interest rate. The amount you will save over the life of the loan could be substantial if you've paid up front about three percent of the new loan total. Please consult with a tax professional before acting on hear-say that these paid points may be deducted on your federal income taxes.
Another thing about taxes is that when you bring down your interest rate, naturally you will also be reducing the interest amount that you'll be able to deduct from your federal income taxes. This is one more expense that borrowers take into consideration. Call us at 3217777277 to help you do the math.
Ultimately, for most the amount of up-front costs to refinance will be paid back very quickly in savings each month. We'll help you determine what loan program is the right fit for you, looking at your cash on hand, how likely you are to sell your house in the near future, and how refinancing could effect your taxes. Call us at 3217777277 to get you started.
Curious about refinancing your home? Give us a call: 3217777277.