Is Refinancing Worth the Cost?
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Looking for a loan? We will be glad to help! Call us at 3217777277. Ready to begin? Apply Here.
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It has been said that only if your new interest will be at least 2 points lower, should you refinance your loan. Perhaps several years ago that was sage advice, but since refinance costs have been falling recently, it may be time to take a serious look. A refinance is often worth its cost many times over, because of the advantages that can come, as well as a reduced interest rate.
Benefits
When you refinance, you could have the ability to lower the interest rate and monthly payment amount, perhaps significantly. You may also be able to "cash out" some of the built-up equity in your home, that you are able use to consolidate debts, add on to your home, or finance a vacation. You may have the option to refinance to a shorter-term mortgage program, enabling you to add to your home equity faster.
Fees and Expenses
As you probably expect, you will have some fees and expenses during the the refinance process. With your refinance, you are paying for basically the same things you were charged for when you got your original mortgage. Among these will be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.
Doing the Math
Paying discount points can help you get a better interest rate. Your savings over the life of the mortgage may be significant if you've paid up front about 3% of the new loan balance. You may have heard that these points can be deducted on your income taxes, but since tax regulations can be difficult to keep up with, please speak with your tax professional before considering this in your calculations.
Speaking of taxes, once your interest rate is lowered, of course you'll also be lowering the paid interest amount that you'll be able to deduct on your taxes. This is another expense that some borrowers take into account. Call us at 3217777277 to help you do the math.
Most borrowers find that the monthly savings quickly balance out the up-front expenses of refinancing. We can help you find out what your options are, considering the effect a refinance could have on your taxes, how likely you may be to sell in the next couple of years, and your money on hand. Call us at 3217777277 to get you started.
Curious about refinancing your home? Call us: 3217777277.