Is Refinancing Worth the Cost?
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Shopping for a mortgage? We'd be thrilled to answer your questions about our mortgage offerings! Give us a call today at 4104614043. Ready to begin? Apply Here.
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Some have said that only in the case your new interest will be at least two points lower, should you refinance your loan. That might have been good advice a while back, but since refinancing has been costing less in recent years, it's never the wrong time to consider a new loan! Refinancing has a variety of benefits that will often make it worth the initial cost a few times over.
Advantages
When you refinance, you could have the ability to lower the interest rate and mortgage payment amount, perhaps by a lot. You also may be given the option of pulling out some of the equity in your property by "cashing out" some money to fix up your home, consolidate debt, or take your family on a vacation. With lower rates, you might also be able to build up home equity faster by changing to a shorter-term mortgage loan.
Expenses and Fees
As you probably know, you will have to pay for the process of refinancing. You will have the same kinds of expenses and fees as with your present mortgage loan. These can include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.
Do the Math
You might think about 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 3% of the new loan total. We recommend that you consult with a tax professional before acting on advice that these points paid may be deducted on your federal income taxes.
One more expense that a borrower might take into account is that a lower rate of interest will reduce the interest amount you will deduct from your federal income taxes. Call us at 4104614043 to help you do the math.
Ultimately, for most borrowers the amount of up-front costs to refinance will be made up soon in monthly savings. We will help you determine what program is best for you, looking at your cash on hand, how likely you are to sell your home in the next few years, and how refinancing will effect your taxes. Call us at 4104614043 to get you started.
Want to know more about refinancing? Call us: 4104614043.