Is Refinancing Worth the Cost?

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Some have said that only when your new interest will be at least 2 points under your current rate, should you refinance your mortgage. That could have been accurate a while back, but as refinancing has been costing less recently, it's never the wrong time to think about a new loan! Refinancing has a number of advantages that can make it worth the up-front cost a few times over.


You might be able to lower your interest rate (sometimes significantly) and reduce your mortgage payment amount with your refinanced mortgage. You also may be given the option of tapping into your home equity by "cashing out" a sum of money to remodel your home, consolidate debt, or take your family on a vacation. With reduced rates, you might also be able to build up home equity more quickly by changing to a shorter-term mortgage loan.

Expenses and Fees

As you probably know, you'll have some fees and expenses during your the refinance process. You will have to pay the same kinds of fees as with your existing home loan. Included in your costs might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Do the Math

Paying discount points can get you a lower interest rate. If you pay (on average) 3% of the loan amount initially, your savings for the term of the refinanced loan can be substantial. 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, if you lower your interest rate, naturally you will also be lowering the paid interest amount that you'll be able to deduct from your federal income taxes. This is another expense that borrowers consider. We can help you do the math! Call us at (321) 777-7277.

Most people find that the savings per month quickly outweigh the initial expenses of a refinance. We can help you explore your options, considering the effect a refinance may have on your taxes, if you are likely to sell your home in the next couple of years, and your available cash. Call us at (321) 777-7277 to get you started.

Want to know more about refinancing your home? Give us a call: (321) 777-7277.

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