Is Refinancing Worth the Cost?
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Searching for a mortgage loan? We'd be thrilled to talk about our many mortgage solutions! Call us at 3038627760. Want to get started? Apply Online Now.
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Have you ever heard the old rule of thumb that states you should only refinance if your new interest rate will be at least two points under your existing one? That could have been accurate years ago, but with refinancing dropping in cost over the last few years, it is a good time to consider a new mortgage loan! A refinanced mortgage may be worth its cost several times over, because of the advantages that may come, along with a reduced interest rate.
Benefits
You could be able to bring down your interest rate (sometimes by a lot) and have smaller mortgage payments with your refinanced mortgage loan. You may also have the option to "cash out" some of the built-up equity in your residence, that you may use to consolidate debts, add on to your home, or take a vacation. With reduced interest rates, you might also get the chance to build up home equity more quickly by changing to a shorter term mortgage loan.
Fees and Expenses
As you probably know, you'll have to pay for the process of refinancing. With your refinance, you're paying for most of the same things you paid for during your current mortgage. These might include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Do the Math
You could offer to pay discount points (prepaid interest) to gain a more favorable rate of interest. The money you will save over the life of the mortgage loan might be substantial if you have paid up front about three percent of the new loan balance. Please consult a tax professional before acting on hear-say that the points paid can be deducted on your taxes.
Another cost that a borrower might take into account is that a lower rate of interest will reduce the interest amount you'll deduct on your federal income taxes. We can help you do the math! Call us at 3038627760.
Most people find that the monthly savings quickly outweigh the initial expenses of refinancing. We can help you figure out what your options are, 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 you started.
Curious about refinancing? Call us: 3038627760.