Weighing the Options of Refinancing
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Ever heard the pearl of wisdom that says you should only refinance if your new interest rate is at least 2 points below your present one? That could have been good advice a while back, but with refinancing dropping in cost recently, it is a good time to consider a new loan! A refinanced loan can be worth its cost many times over, considering the benefits that it brings, along with a reduced interest rate.
Benefits from Refinancing
You might be able to bring down your interest rate (sometimes by a lot) and reduce your monthly payment amount with a refinanced mortgage loan. You may also be able to "cash out" a portion of the built-up equity in your residence, that you are able use to take care of higher interest debts, add on to your home, or take a vacation. You could be able to refinance into a shorter-term mortgage, enabling you to build up your home equity faster.
Fees and Expenses
Of course, you will have some fees and expenses during your the refinance process. You'll have to pay the same sort of fees as you did with your existing home loan. Among these can be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.
Doing the Math
You might investigate paying points to be given a lower interest rate. When you pay (on average) 3% of the mortgage loan amount initially, the savings for the life of the refinanced mortgage loan can be substantial. Please consult a tax professional before acting on advice that any paid points can be deducted on your federal income taxes.
One more expense that borrowers might consider is that a reduced interest rate will reduce the interest amount you'll deduct on your taxes. We can help you do the math! Call us at 9254610500.
Most people find that the savings each month quickly outweigh the initial cost of refinancing. We can help you figure out your options, considering the effect a refinance could have on your taxes, how likely you might be to sell in the next couple of years, and your available cash. Call us at 9254610500 to get started.
Want to know more about refinancing your home? Give us a call at 9254610500.