Weighing the Options of Refinancing
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It has been said that only if your new interest is at least 2 points under your current rate, should you refinance your loan. That could have been valid years ago, but with refinancing dropping in cost over the last few years, it is a good time to consider a new mortgage! A refinance is often worth its cost several times over, considering the benefits that it brings, as well as a lower interest rate.
Advantages
When you refinance, you might be able to reduce the interest rate and mortgage payment , perhaps considerably. You also might have the option of pulling out some of the equity in your property by "cashing out" a sum of money to renovate your home, consolidate debt, or plan a special vacation. You might be able to refinance into a shorter-term mortgage loan, enabling you to add to your home equity faster.
Fees and Expenses
All these benefits do cost something, though. You'll have to pay the same kinds of expenses and fees as you did with your existing mortgage loan. Included in the list might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Doing the Math
Paying points can help you get a lower interest rate. Your savings on the life of the mortgage could be significant if you've paid up front about three percent of the new loan total. Please consult with a tax professional before acting on hear-say that these points paid can be deducted on your federal income taxes.
One more cost that a borrower might consider is that a lower rate of interest will lower the interest amount you'll deduct on your federal income taxes. Call us at 9254610500 to help you do the math.
In the end, for most the amount of up-front costs to refinance will be made up soon in monthly savings. We can help you explore what your options are, considering the effect a refinance might have on your taxes, how likely you might be to sell in the near future, and your available cash. Call us at 9254610500 to get you started.
Curious about refinancing your home? Give us a call at 9254610500.