Is Refinancing Worth the Cost?
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Are you looking for a mortgage? We can help! Give us a call at 4104614043. Ready to begin? Apply Online Now.
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It has been said that only when your new interest will be at least two points below your current rate, should you refinance your mortgage. That may have been valid years ago, but with the fact that refinancing has been costing less in recent years, it's a good time to consider a new loan! A refinanced loan is often worth its cost many times over, because of the advantages that may come, as well as a reduced interest rate.
Benefits
You could be able to bring down your interest rate (sometimes substantially) and make smaller mortgage payments with your refinanced mortgage loan. You also could be given the option of tapping into your home equity by "cashing out" some funds to fix up your home, consolidate debt, or take your family on a vacation. With lower interest rates, you may also get the chance to build up home equity more quickly by switching to a shorter term mortgage.
Expenses and Fees
Of course, you will have to pay for your the refinance process. You'll pay the same types of expenses and fees as you did with your existing mortgage. These may 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. Your savings over the life of the mortgage loan could be significant if you've paid up front about three percent of the new loan balance. Please consult with a tax professional before acting on hear-say that these points paid may be deducted on your federal income taxes.
Speaking of taxes, if your interest rate is reduced, it follows that you'll also be lowering the interest amount that you'll be able to deduct from your taxes. This is another expense that some borrowers consider. Call us at 4104614043 to help you do the math.
Ultimately, for most people the total of up-front costs to refinance are paid back soon in savings each month. We can help you find out your options, considering the effect a refinance could have on your taxes, how likely you might be to sell in the near future, and your available cash. Call us at 4104614043 to get started.
Want to know more about refinancing your home? Give us a call: 4104614043.