When is Refinancing Worth it?
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Are you looking for a new mortgage? We'd be thrilled to discuss our mortgage offerings! Give us a call at 7068605514. Want to get started? Apply Here.
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It has been said that only if your new interest is at least two points lower, should you refinance your loan. That could have been valid a while back, but with the fact that refinancing has been costing less recently, it is a good time to consider a new loan! Refinancing your mortgage loan has a number of benefits that often make it worth the up-front cost a few times over.
Benefits from Refinancing
When you refinance, you may have the ability to lower the interest rate and mortgage payment amount, perhaps considerably. You might also be able to "cash out" some of the built-up equity in your residence, which you are able use to take care of higher interest debts, make home improvements, or take a vacation. With reduced rates, you might also get the chance to build up home equity faster by changing to a shorter term mortgage.
Fees and Expenses
All of these advantages do come with some expense, though. With your refinance, you're paying for basically the same things you paid for during your current mortgage loan. These may include settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and so on.
Do the Math
You might investigate paying points to reduce your interest rate. Your savings on the life of the mortgage might be significant if you have paid up front about three percent of the new loan balance. Please talk to a tax professional before acting on hear-say that any paid points can be deducted on your taxes.
One more expense that a borrower may consider is that a lower rate of interest will reduce the interest amount you will deduct from your taxes. We can help you do the math! Call us at 7068605514.
All things considered, for most the amount of up-front costs to refinance are paid back soon in savings each month. We will work with you to figure out what loan program is right for you, considering your cash on hand, the likelihood of selling your home in the near future, and what effect refinancing may have on your taxes. Call us at 7068605514 to get you started.
Want to know more about refinancing? Give us a call at 7068605514.