Is Refinancing Worth the Cost?

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Some have said that only if your new interest is at least 2 points under your current rate, should you refinance your mortgage. That could have been valid a while back, but with refinancing dropping in cost in recent years, it is never the wrong time to consider a new mortgage loan! Refinancing your mortgage loan has a number of advantages that can make it worth the initial cost a few times over.

Benefits

You could be able to bring down your interest rate (sometimes significantly) and make smaller mortgage payments with a refinanced mortgage loan. You might also be able to "cash out" a portion of your equity, which you will be able use to take care of higher interest debt, add on to your home, or finance a vacation. With reduced interest rates, you might also be able to build up home equity faster by moving to a shorter-term mortgage loan.

The Cost

As you probably know, you will have some fees and expenses during your the refinance process. You'll have to pay the same types of fees as with your existing mortgage loan. Included in the list will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Doing the Math

Paying points can get you a lower interest rate. The money you will save over the life of the mortgage may be significant if you've paid up front about three percent of the new loan balance. Please consult a tax professional before acting on hear-say that any paid points can be deducted on your taxes.

One more expense that borrowers might consider is that a reduced interest rate will lower the interest amount you'll deduct from your taxes. We can help you do the math! Call us at 9254610500.

Most borrowers find that the savings each month outweigh the up-front cost of a refinance. We will help you figure out what mortgage loan program is the ideal fit for you, considering your cash on hand, how likely you are to sell your house in the next few years, and how refinancing may effect your taxes. Call us at 9254610500 to get started.

Curious about refinancing? Call us: 9254610500.

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Pacificwide Lending

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7041 Koll Center Pkwy Ste 270 Ste 270
Pleasanton, CA 94566