Is Refinancing Worth the Cost?
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Ever hear the old rule of thumb that states you should only refinance if your new interest rate will be at least 2 points under your existing rate? Perhaps several years ago that was sage advice, but as refinance costs have been getting lower, it could be time to look into it. Refinancing has a variety of benefits that can make it worth the initial expenditure many times over.
You may be able to lower your interest rate (sometimes substantially) and reduce your monthly mortgage payment amount with your refinanced mortgage. Additionally, you might have the option of pulling out some of the equity in your home by "cashing out" a sum of money to remodel your home, consolidate debt, or plan a special vacation. With reduced rates, you might also be able to build up home equity more quickly by changing to a shorter term mortgage loan.
As you probably expect, you will have to pay for the process of refinancing. You'll have the same sort of fees as with your current mortgage loan. Among these will be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.
Do the Math
You might consider paying points to get a lower interest rate. Your savings on the life of the mortgage may be substantial if you have paid up front about 3% of the new loan balance. Please talk to a tax professional before acting on rumors that any points paid can be deducted on your federal income taxes.
Another thing about taxes is that once you bring down your interest rate, of course you will also be reducing the interest amount that you'll be able to deduct on your taxes. This is another cost that borrowers take into consideration. We can help you do the math! Call us at 7068605514.
Ultimately, for most borrowers the amount of initial costs to refinance will be paid back soon in savings each month. We will help you find out what mortgage loan program is best for you, looking at your cash on hand, how likely you are to sell your residence in the near future, and the effect refinancing will have on your taxes. Call us at 7068605514 to get you started.
Curious about refinancing? Call us: 7068605514.