Is Refinancing Worth the Cost?
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Are you looking for a mortgage loan? We'd be thrilled to discuss your mortgage needs! Call us at 4078987559. Ready to get started? Apply Now.
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Have you ever heard the pearl of wisdom that says you should only consider refinancing if the new interest rate will be at least two points under your current rate? That could have been valid a while back, but as refinancing has been costing less over the last few years, it is a good time to explore the options of a new loan! A refinanced loan is often worth its cost many times over, considering the benefits that it brings, as well as a reduced interest rate.
Benefits
You might be able to lower your interest rate (sometimes substantially) and make smaller mortgage payments with your refinanced mortgage loan. You could also be able to "cash out" a portion of the built-up equity in your residence, which you can use to take care of higher interest debt, add on to your home, or take a vacation. You could have the option to refinance into a shorter-term mortgage program, enabling you to build your home equity faster.
Expenses and Fees
As you probably know, you'll have some fees and expenses during your process of refinancing. You will be charged the same kinds of expenses and fees as with your present mortgage. These probably include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.
Do the Math
You might consider paying points to be given a better interest rate. When you pay (on average) three percent of the loan amount initially, your savings for the life of the new mortgage loan can be significant. We recommend that you consult with a tax professional before acting on rumors that the points paid may be deducted on your federal income taxes.
An additional cost that a borrower might consider is that a reduced rate of interest will reduce the interest amount you will be able to deduct on your federal income taxes. Call us at 4078987559 to help you do the math.
Most borrowers find that the monthly savings outweigh the initial cost of a refinance. We can help you explore your options, considering the effect a refinance may have on your taxes, how likely you may be to sell in the next couple of years, and your cash on hand. Call us at 4078987559 to get started.
Want to know more about refinancing your home? Give us a call at 4078987559.