Is Refinancing Worth the Cost?
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Looking for a mortgage loan? We can assist you! Give us a call today at 9254610500. Ready to begin? Apply Here.
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Ever heard the old rule of thumb that states you should only consider refinancing if your new interest rate is at least two points lower than your existing rate? Perhaps that was good advice a number of years ago, but as refinance costs have been getting lower, it may be time to look into it. A refinanced mortgage may be worth its cost many times over, factoring in the advantages that it brings, along with a lower interest rate.
Benefits
You might be able to lower your interest rate (sometimes by a lot) and reduce your mortgage payment amount with your refinanced mortgage. Additionally, you could have the option of tapping into the equity in your home by "cashing out" some money to fix up your home, consolidate debt, or take your family on a vacation. You might have the option to refinance into a shorter-term mortgage loan, enabling you to build your home equity faster.
Fees and Expenses
All these advantages do come with some expense, though. You will pay the same kinds of fees as with your existing home loan. These might include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.
Do the Math
You might think about paying points to reduce your interest rate. The money you will save on the life of the mortgage may be significant if you've paid up front about three percent of the new loan total. You might have heard that these points may be deducted on your income taxes, but since tax regulations can be difficult to keep up with, we urge you to consult with your tax professional before considering this in your calculations.
Another thing about taxes is that when you lower your interest rate, it follows that you will also be lowering the interest amount that you'll be able to deduct from your taxes. This is another cost that borrowers take into consideration. We can help you do the math! Call us at 9254610500.
Most people find that the monthly savings balance out the initial cost of a refinance. We'll work with you to determine what loan program is right for you, looking at your cash on hand, how likely you are to sell your residence in the next few years, and what effect refinancing could have on your taxes. Call us at 9254610500 to get started.
Curious about refinancing? Call us: 9254610500.