When is Refinancing Worth it?

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It has been said that only if your new interest will be at least 2 points lower, should you refinance your mortgage. That could have been good advice years ago, but with refinancing dropping in cost recently, it's a good time to think about a new mortgage loan! Refinancing your mortgage loan has a number of benefits that can make it worth the initial cost several times over.


You might be able to lower your interest rate (sometimes significantly) and reduce your monthly mortgage payment amount with your refinanced mortgage. You also could have the option of pulling out some of the equity in your property by "cashing out" some money to fix up your home, consolidate debt, or take your family on a vacation. With lower rates, you might also be able to build your home equity more quickly by changing to a shorter-term mortgage loan.

Fees and Expenses

All of these advantages do cost something, though. You'll have the same sort of fees as you did with your existing mortgage loan. Among these can be 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 get a lower interest rate. If you pay (on average) three percent of the mortgage loan amount up front, your savings for the term of the refinanced mortgage can be great. Please consult with a tax professional before acting on advice that these paid points may be deducted on your taxes.

Speaking of taxes, once you lower your interest rate, it follows that you'll also be lowering the paid interest amount that you can deduct on your federal income taxes. This is one more expense that borrowers take into account. We can help you do the math! Call us at 4078987559.

In the end, for most borrowers the total of up-front costs to refinance are paid back very quickly in savings each month. We can help you explore your options, considering the effect a refinance might have on your taxes, how likely you may be to sell in the next couple of years, and your available cash. Call us at 4078987559 to get started.

Want to know more about refinancing? Give us a call: 4078987559.

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2306 Curry Ford Rd
Orlando, FL 32806