When is Refinancing Worth it?

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It has been said that only if your new interest is at least two points below your current rate, should you refinance your loan. Maybe several years ago that was sage advice, but as refinance costs have been falling recently, it could be a good time to take a serious look. A refinance is often worth its cost several times over, factoring in the benefits that come, along with a reduced interest rate.

Benefits

When you refinance, you might be able to lower the interest rate and monthly mortgage payment , sometimes considerably. You might also be able to "cash out" a portion of the built-up equity in your residence, which you are able use to take care of higher interest debt, add on to your home, or finance a vacation. You might have the option to refinance into a shorter-term mortgage program, giving you the ability to build up your equity faster.

Expenses and Fees

All these benefits do come with some expense, though. You will pay the same types of expenses and fees as you did with your current mortgage. Among these will be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.

Doing the Math

Paying discount points can help you attain a lower interest rate. The amount you'll save over the life of the mortgage loan may be significant if you have paid up front about 3% of the new loan total. We recommend that you consult a tax professional before acting on advice that any points paid may be deducted on your federal income taxes.

An additional cost that a borrower might take into account is that a reduced interest rate will lower the interest amount you will be able to deduct from your taxes. We can help you do the math! Call us at 7068605514.

Most people find that the savings each month quickly outweigh the up-front cost of refinancing. We can help you explore what your options are, considering the effect a refinance could have on your taxes, how likely you might be to sell in the near future, and your available cash. Call us at 7068605514 to get started.

Curious about refinancing your home? Call us at 7068605514.

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Augusta Mortgage Solutions

NMLS#:148529 GA Residential Mortgage Licensee #18861

141 North Belair Road Suite 102 NMLS# 149807
Evans, GA 30809-7431