Is Refinancing Worth the Cost?
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Looking for mortgage advice? We'll be glad to discuss our many mortgage solutions! Call us at 7068605514. Ready to get started? Apply Now.
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Ever heard the pearl of wisdom that states you should only refinance if the new interest rate is at least two points under your current rate? Perhaps that was good advice several years ago, but since refinance costs have been falling recently, it could be a good time to look into it. Refinancing has a variety of advantages that can make it worth the up-front expenditure several times over.
Advantages
When you refinance, you might be able to lower the interest rate and mortgage payment amount, perhaps considerably. Additionally, you may have the option of tapping into your home equity by "cashing out" a sum of money to renovate your home, consolidate debt, or plan a special vacation. You may be able to refinance to a shorter-term mortgage program, enabling you to add to your equity quicker.
The Cost
As you probably know, you'll have to pay for your the refinance process. You'll have to pay the same sort of expenses and fees as with your existing mortgage loan. Included in your costs might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Doing the Math
Paying points can get you a better interest rate. When you pay (on average) 3% of the loan amount initially, the savings for the life of the new loan can be great. We recommend that you consult a tax professional before acting on rumors that the points paid can be deducted on your taxes.
An additional cost that borrowers might consider is that a reduced rate of interest will lower the interest amount you will be able to deduct on your federal income taxes. We can help you do the math! Call us at 7068605514.
Most people find that the monthly savings quickly balance out the initial cost of a refinance. We can help you figure out your options, considering the effect a refinance might have on your taxes, how likely you may be to sell in the next couple of years, and your money on hand. Call us at 7068605514 to get you started.
Want to know more about refinancing? Give us a call: 7068605514.