Is Refinancing Worth the Cost?
 |
 |
 |
Are you looking for a new mortgage loan? We can help! Give us a call today at . Ready to begin? Apply Here.
|
|
|
|
|
It has been said that only if your new interest is at least two points lower, should you refinance your loan. That might have been valid a while back, but with refinancing dropping in cost in recent years, it is never the wrong time to think about a new mortgage! Refinancing has a variety of advantages that often make it worth the initial cost several times over.
Advantages
You might be able to bring down your interest rate (sometimes substantially) and have smaller monthly payments with your refinanced mortgage loan. You might also have the option to "cash out" a portion of your equity, that you may use to take care of higher interest debt, make home improvements, or plan a vacation. You may have the option to refinance to a shorter-term mortgage, giving you the ability to add to your equity quicker.
Fees and Expenses
All of these benefits do cost something, though. With your refinance, you are paying for basically the same things you were charged for during your current mortgage. Among these may be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.
Do the Math
You could offer to pay points (prepaid interest) to get a more favorable rate of interest. If you pay (on average) three percent of the loan amount up front, your savings for the life of the new loan can be great. You might hear that these points can be tax deductible, but because tax regulations can be ever-changing, please speak with a tax professional before depending on this.
Speaking of taxes, once your interest rate is lowered, it follows that you'll also be reducing the paid interest amount that you'll be able to deduct on your taxes. This is one more expense that borrowers take into consideration. We can help you do the math! Call us at .
In the end, for most borrowers the total of up-front costs to refinance are made up soon in savings each month. We will help you determine which mortgage program is the ideal fit for you, looking at your cash on hand, how likely you are to sell your home in the near future, and how refinancing could effect your taxes. Call us at to get you started.
Want to know more about refinancing your home? Give us a call: .