Is Refinancing Worth the Cost?
 |
 |
 |
Shopping for a mortgage loan? We can help! Call us at 4078987559. Want to get started? Apply Here.
|
|
|
|
|
Ever heard the old rule of thumb that states you should only consider refinancing if the new interest rate will be at least 2 points under your present rate? That may have been valid years ago, but with refinancing dropping in cost recently, it is never the wrong time to consider a new mortgage! Refinancing your loan has a variety of benefits that will often make it worth the initial expenditure many times over.
Benefits
When you refinance, you could be able to lower the interest rate and monthly payment amount, sometimes by a lot. You may also be able to "cash out" some of your home equity, which you can use to consolidate debt, add on to your home, or take a vacation. With reduced interest rates, you might also get the chance to build your home equity faster by moving to a shorter term mortgage.
Expenses and Fees
Of course, you'll have to pay for your process of refinancing. You will have to pay the same kinds of fees as with your existing mortgage loan. Included in the list will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
Paying discount points can result in a better interest rate. Your savings over the life of the mortgage could be substantial if you have paid up front about 3% of the new loan balance. We recommend that you consult a tax professional before acting on rumors that any paid points may be deducted on your taxes.
Another thing about taxes is that once you lower your interest rate, naturally you will also be lowering the interest amount that you'll be able to deduct on your federal income taxes. This is one more cost that some borrowers take into account. Call us at 4078987559 to help you do the math.
Most borrowers find that the monthly savings quickly outweigh the initial expenses of refinancing. We'll work with you to determine which mortgage program is right for you, looking at your cash on hand, how likely you are to sell your home in the next few years, and how refinancing can effect your taxes. Call us at 4078987559 to get started.
Want to know more about refinancing? Call us at 4078987559.