Weighing the Options of Refinancing

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Some have said that only if your new interest will be at least two points under your current rate, should you refinance your mortgage. That may have been accurate a while back, but with the fact that refinancing has been costing less in recent years, it's never the wrong time to consider a new mortgage loan! Refinancing your mortgage loan has various benefits that will often make it worth the initial cost several times over.


When you refinance, you could have the ability to lower the interest rate and monthly payment amount, sometimes significantly. Additionally, you might have the option of pulling out some of the equity in your home by "cashing out" some funds to remodel your home, consolidate debt, or plan a special vacation. You could have the option to refinance into a shorter-term mortgage loan, enabling you to add to your equity quicker.

Expenses and Fees

All these advantages do cost something, though. You'll be charged the same sort of fees as you did with your existing mortgage. Included in your costs will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Doing the Math

You could need to pay points (prepaid interest) to gain a better interest rate. If you pay (on average) three percent of the mortgage loan amount initially, your savings for the life of the refinanced mortgage can be significant. Please consult a tax professional before acting on hear-say that the paid points may be deducted on your taxes.

Another thing about taxes is that if your interest rate is lowered, of course you will also be reducing the paid interest amount that you'll be able to deduct on your federal income taxes. This is another expense that borrowers take into consideration. Call us at 3038627760 to help you do the math.

Most people find that the savings per month quickly outweigh the initial cost of refinancing. We can help you explore what your options are, considering the effect a refinance could have on your taxes, how likely you might be to sell in the near future, and your available cash. Call us at 3038627760 to get started.

Want to know more about refinancing? Give us a call: 3038627760.