Is Refinancing Worth the Cost?

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It has been said that only in the case your new interest is at least two points below your current rate, should you refinance your loan. Perhaps that was sound advice a number of years ago, but as refinance costs have been getting lower, it may be time to take a serious look. Refinancing your mortgage has a variety of benefits that will often make it worth the initial expenditure many times over.


When you refinance, you could be able to reduce your interest rate and mortgage payment , sometimes by a lot. You might also be able to "cash out" some of your equity, that you can use to take care of higher interest debts, make home improvements, or plan a vacation. You might have the option to refinance to a shorter-term mortgage, enabling you to build up your equity faster.

The Cost

Of course, you will have to pay for the the refinance process. You will have to pay the same sort of fees as you did with your existing mortgage loan. Included in your costs might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Doing the Math

Paying discount points can result in a better interest rate. Your savings on the life of the mortgage loan might be significant if you have paid up front about 3% of the new loan total. You might have heard that these points can be tax deductible, but because tax regulations can be ever-changing, we urge you to consult with your tax professional before depending on this.

Another thing about taxes is that if you lower your interest rate, it follows that you will also be reducing the paid interest amount that you may deduct from your federal income taxes. This is one more expense that some borrowers take into consideration. Call us at 3038627760 to help you do the math.

Most borrowers find that the monthly savings outweigh the initial expenses of a refinance. We can help you find out what your options are, considering the effect a refinance might have on your taxes, if you are likely to sell your home in the near future, and your available cash. Call us at 3038627760 to get you started.

Want to know more about refinancing your home? Give us a call at 3038627760.