Is Refinancing Worth the Cost?

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Ever hear the pearl of wisdom that says you should only refinance if the new interest rate will be at least two points below your current rate? That may have been sound advice a while back, but with refinancing dropping in cost in recent years, it is never the wrong time to consider a new loan! Refinancing your loan has various benefits that often make it worth the up-front cost a few times over.


You might be able to bring down your interest rate (sometimes substantially) and reduce your monthly payment amount with your refinanced mortgage. Additionally, you could have the option of tapping into your home equity by "cashing out" some funds to remodel your home, consolidate debt, or take your family on a vacation. With reduced rates, you might also get the chance to build up home equity more quickly by switching to a shorter-term mortgage loan.

Fees and Expenses

All of these advantages do come with some expense, though. You'll be charged the same kinds of expenses and fees as you did with your existing mortgage. Included in the list will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Do the Math

Paying points can result in a better interest rate. The amount you will save on the life of the mortgage loan could be significant if you have paid up front about 3% of the new loan total. Please consult a tax professional before acting on advice that any points paid can be deducted on your federal income taxes.

An additional expense that borrowers may take into account is that a reduced interest rate will reduce the interest amount you'll be able to deduct from your taxes. We can help you do the math! Call us at 3038627760.

All things considered, for most borrowers the total of initial costs to refinance will be made up soon in savings each month. We will help you find out which loan program is right for you, looking at your cash on hand, the likelihood of selling your house in the near future, and how refinancing can effect your taxes. Call us at 3038627760 to get you started.

Curious about refinancing? Give us a call: 3038627760.