Weighing the Options of Refinancing
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Some have said that only if your new interest will be at least two points below your current rate, should you refinance your mortgage. Perhaps that was sound advice a number of years ago, but since refinance costs have been falling recently, it may be a good time to look into it. A refinanced mortgage loan can be worth its cost many times over, considering the benefits that it brings, along with a lower interest rate.
Advantages of Refinancing
You could be able to lower your interest rate (sometimes significantly) and reduce your monthly payment amount with a refinanced mortgage. You may also have the option to "cash out" a portion of your home equity, that you can use to take care of higher interest debts, add on to your home, or plan a vacation. You could be able to refinance to a shorter-term mortgage, giving you the ability to build up your equity faster.
Expenses and Fees
Of course, you'll have to pay for your the refinance process. With your refinance, you are paying for basically the same things you paid for during your current mortgage. Among these can be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and so on.
Doing the Math
Paying points can help you get a better interest rate. Your savings on the life of the mortgage loan could be significant if you have paid up front about 3% of the new loan balance. Please talk to a tax professional before acting on advice that the points paid can be deducted on your federal income taxes.
One more expense that a borrower might consider is that a lower interest rate will lower the interest amount you'll be able to deduct from your taxes. Call us at 3038627760 to help you do the math.
Most borrowers find that the monthly savings balance out the up-front cost of refinancing. We will work with you to determine what program is best for you, considering your cash on hand, how likely you are to sell your home in the near future, and how refinancing will effect your taxes. Call us at 3038627760 to get you started.
Want to know more about refinancing your home? Give us a call at 3038627760.