Weighing the Options of Refinancing

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Have you ever heard the pearl of wisdom that states you should only refinance if the new interest rate will be at least two points lower than your current rate? That may have been valid years ago, but with the fact that refinancing has been costing less in recent years, it's a good time to think about a new mortgage! A refinance is often worth its cost many times over, factoring in the advantages that it brings, as well as a reduced interest rate.


When you refinance, you may have the ability to lower your interest rate and monthly mortgage payment amount, sometimes significantly. You may also have the ability to "cash out" some of your home equity, which you are able use to take care of higher interest debt, make home improvements, or finance a vacation. You might be able to refinance to a shorter-term mortgage loan, enabling you to build up your home equity quicker.

Expenses and Fees

As you probably know, you'll have some fees and expenses during your the refinance process. With your refinance, you are paying for many of the same things you paid for during your original mortgage. Among these may be settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.

Do the Math

Paying points can result in a lower interest rate. The amount you'll save over the life of the mortgage could be significant if you've paid up front about 3% of the new loan total. Please consult a tax professional before acting on rumors that the points paid can be deducted on your federal income taxes.

Another cost that borrowers might take into account is that a reduced interest rate will lower the interest amount you will be able to deduct on your taxes. We can help you do the math! Call us at 3038627760.

Most borrowers find that the monthly savings quickly outweigh the up-front expenses of refinancing. We can help you figure out your options, considering the effect a refinance may have on your taxes, whether you are likely to sell your home in the near future, and your available cash. Call us at 3038627760 to get started.

Curious about refinancing? Give us a call: 3038627760.