When is Refinancing Worth it?
 |
 |
 |
Searching for mortgage advice? We'd be thrilled to answer your questions about our mortgage offerings! Call us at 4078987559. Ready to get started? Apply Here.
|
|
|
|
|
Some have said that only when your new interest will be at least 2 points under your current rate, should you refinance your loan. Maybe that was sound advice a number of years ago, but as refinance costs have been getting lower, it could be a good time to take a serious look. A refinance may be worth its cost many times over, factoring in the advantages that it brings, in addition to a lower interest rate.
Benefits from Refinancing
When you refinance, you could be able to reduce the interest rate and monthly mortgage payment amount, sometimes by a lot. You could also be able to "cash out" some of your equity, which you can use to take care of higher interest debt, make home improvements, or plan a vacation. With lower interest rates, you might also be able to build your home equity faster by changing to a shorter-term mortgage loan.
Expenses and Fees
Of course, you'll have some fees and expenses during the the refinance process. You'll pay the same kinds of fees as you did with your existing home loan. These could include settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.
Do the Math
You might investigate paying points to reduce your interest rate. Your savings on the life of the mortgage might be significant if you've paid up front about three percent of the new loan balance. We recommend that you consult a tax professional before acting on hear-say that any points paid may be deducted on your taxes.
Another expense that borrowers may consider is that a lower interest rate will lower the interest amount you'll deduct on your federal income taxes. Call us at 4078987559 to help you do the math.
Most people find that the monthly savings balance out the up-front expenses of a refinance. We'll help you determine what mortgage loan program is ideal for you, considering your cash on hand, the likelihood of selling your residence in the next few years, and the effect refinancing will have on your taxes. Call us at 4078987559 to get you started.
Curious about refinancing? Give us a call: 4078987559.