When is Refinancing Worth it?
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Some have said that only in the case your new interest will be at least 2 points under your current rate, should you refinance your mortgage. Perhaps that was good advice a number of years ago, but since refinance costs have been getting lower, it could be time to look into it. A refinanced mortgage loan is often worth its cost many times over, factoring in the benefits that can come, along with a lower interest rate.
Advantages of Refinancing
You may be able to bring down your interest rate (sometimes significantly) and make smaller monthly payments with a refinanced loan. You could also have the ability to "cash out" some of your equity, that you will be able use to consolidate debts, improve your home, or take a vacation. You could be able to refinance to a shorter-term mortgage program, enabling you to build your equity faster.
The Cost
Of course, you'll have some fees and expenses during your the refinance process. You'll be charged the same kinds of expenses and fees as you did with your existing home loan. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
Paying discount points can help you attain a better interest rate. If you pay (on average) three percent of the mortgage loan amount up front, the savings for the life of the new loan can be significant. We recommend that you consult with a tax professional before acting on rumors that the points paid may be deducted on your federal income taxes.
An additional cost that a borrower may consider is that a reduced rate of interest will reduce the interest amount you'll 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 savings each month quickly balance out the initial cost of refinancing. We can help you find out what your options are, considering the effect a refinance might have on your taxes, if you are likely to sell your home in the near future, and your money on hand. Call us at 7068605514 to get you started.
Curious about refinancing? Give us a call: 7068605514.