Weighing the Options of Refinancing
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Some have said that only if your new interest will be at least 2 points under your current rate, should you refinance your mortgage. That may have been true a while back, but with refinancing dropping in cost recently, it's a good time to think about a new mortgage loan! A refinance is often worth its cost many times over, considering the benefits that come, along with a reduced interest rate.
Benefits from Refinancing
You may be able to bring down your interest rate (sometimes significantly) and reduce your monthly payment amount with your refinanced mortgage loan. You may also have the option to "cash out" some of the built-up equity in your home, which you may use to consolidate debt, make home improvements, or finance a vacation. With lower rates, you might also get the chance to build up home equity more quickly by moving to a shorter term mortgage.
Expenses and Fees
As you probably know, you will have some fees and expenses during your the refinance process. You will have to pay the same kinds of expenses and fees as you did with your present home loan. These could include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Doing the Math
Paying points can help you attain 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. Please talk to a tax professional before acting on advice that the paid points can be deducted on your federal income taxes.
Another cost that borrowers may consider is that a lower interest rate will lower the interest amount you'll be able to deduct on your taxes. We can help you do the math! Call us at 3217777277.
All things considered, for most the amount of up-front costs to refinance are made up very quickly in monthly savings. We can help you find out your options, considering the effect a refinance might 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 3217777277 to get started.
Want to know more about refinancing your home? Give us a call at 3217777277.