When is Refinancing Worth it?
 |
 |
 |
Shopping for a mortgage loan? We'd be thrilled to discuss our many mortgage solutions! Call us at 3217777277. Want to get started? Apply Here.
|
|
|
|
|
It has been said that only in the case your new interest is at least two points lower, should you refinance your mortgage. Perhaps several years ago that was good advice, but as refinance costs have been getting lower, it could be a good time to take a serious look. Refinancing your loan has some benefits that often make it worth the initial expenditure many times over.
Benefits
When you refinance, you might be able to reduce the interest rate and mortgage payment , perhaps considerably. You may also have the ability to "cash out" a portion of the built-up equity in your home, that you will be able use to consolidate debt, improve your home, or finance a vacation. With lower interest rates, you might also get the chance to build up home equity more quickly by changing to a shorter term mortgage loan.
Fees and Expenses
As you probably expect, you'll have to pay for the the refinance process. You'll pay the same types of fees as you did with your existing home loan. Included in your costs will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You might think about paying points to reduce your interest rate. Your savings over the life of the mortgage loan could be substantial if you've paid up front about three percent of the new loan total. You might be told that the points may be tax deductible, but as tax regulations are ever-changing, we urge you to consult with your tax professional before considering this in your calculations.
Another thing about taxes is that if you reduce your interest rate, naturally you'll also be reducing the interest amount that you'll be able to deduct from your federal income taxes. This is one more cost that some borrowers take into account. Call us at 3217777277 to help you do the math.
Most borrowers find that the savings per month balance out the up-front expenses of refinancing. We can help you explore what your options are, considering the effect a refinance might have on your taxes, whether you are likely to sell your home in the near future, and your cash on hand. Call us at 3217777277 to get started.
Want to know more about refinancing your home? Call us at 3217777277.