Is Refinancing Worth the Cost?
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Are you looking for a new mortgage loan? We'd be thrilled to discuss our many mortgage solutions! Give us a call today at 3038627760. Ready to get started? Apply Here.
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It has been said that only in the case your new interest is at least two points under your current rate, should you refinance your mortgage. Maybe that was sound advice several years ago, but since refinance costs have been getting lower, it could be a good time to look into it. A refinance is often worth its cost several times over, factoring in the benefits that it brings, as well as a lower interest rate.
Benefits
When you refinance, you may have the ability to lower your interest rate and mortgage payment , sometimes considerably. You could also have the ability to "cash out" a portion of your equity, which you may use to consolidate debts, add on to your home, or plan a vacation. With lower interest rates, you might also be able to build your home equity more quickly by changing to a shorter term loan.
Fees and Expenses
All these benefits do cost something, though. When you refinance, you're paying for basically the same things you paid for when you got your current mortgage. These probably include settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.
Do the Math
You might consider paying points to reduce your interest rate. If you pay (on average) three percent of the loan amount initially, the savings for the term of the refinanced mortgage loan can be great. We recommend that you consult with a tax professional before acting on advice that any paid points may be deducted on your federal income taxes.
Another thing about taxes is that when you bring down your interest rate, it follows that you'll also be lowering the paid interest amount that you'll be able to deduct from your federal income taxes. This is one more cost that borrowers consider. We can help you do the math! Call us at 3038627760.
Most borrowers find that the monthly savings balance out the up-front cost of refinancing. We'll work with you to determine which mortgage loan program is perfect for you, considering your cash on hand, how likely you are to sell your residence in the near future, and what effect refinancing will have on your taxes. Call us at 3038627760 to get started.
Curious about refinancing? Give us a call at 3038627760.