Is Refinancing Worth the Cost?
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Shopping for a mortgage? We can help! Call us at 7068605514. Ready to get started? Apply Online Now.
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It has been said that only when your new interest is at least 2 points under your current rate, should you refinance your loan. That might have been accurate a while back, but since refinancing has been costing less recently, it is never the wrong time to consider a new mortgage! A refinance is often worth its cost several times over, because of the advantages that can come, along with a reduced interest rate.
Benefits
You may be able to lower your interest rate (sometimes by a lot) and have smaller monthly payments with your refinanced mortgage. You could also have the ability to "cash out" a portion of the built-up equity in your residence, that you are able use to take care of higher interest debts, make home improvements, or take a vacation. You could be able to refinance to a shorter-term mortgage loan, giving you the ability to build your equity quicker.
Expenses and Fees
Of course, you will have to pay for the the refinance process. You'll pay the same kinds of expenses and fees as with your existing home loan. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
Paying points can help you get a better interest rate. When you pay (on average) 3% of the loan amount at the start, the savings for the term of the refinanced mortgage can be great. We recommend that you consult with a tax professional before acting on rumors that the paid points may be deducted on your federal income taxes.
Another thing about taxes is that once your interest rate is lowered, naturally you will also be reducing the paid interest amount that you'll be able to deduct on your federal income taxes. This is one more cost that some borrowers take into account. We can help you do the math! Call us at 7068605514.
In the end, for most borrowers the total of initial costs to refinance will be made up soon in savings each month. We will work with you to find out which mortgage program is right for you, looking at your cash on hand, how likely you are to sell your home in the next few years, and what effect refinancing may have on your taxes. Call us at 7068605514 to get you started.
Curious about refinancing your home? Give us a call: 7068605514.