Is Refinancing Worth the Cost?
 |
 |
 |
Searching for a loan? We'd be thrilled to talk about our many mortgage solutions! Give us a call today at 4056158543. Want to get started? Apply Online Now.
|
|
|
|
|
Ever hear the pearl of wisdom that says you should only consider refinancing if the new interest rate is at least 2 points lower than your present one? That may have been valid years ago, but with refinancing dropping in cost in recent years, it is a good time to consider a new mortgage loan! Refinancing has some advantages that often make it worth the up-front expenditure many times over.
Advantages
You could be able to bring down your interest rate (sometimes substantially) and have smaller monthly payments with your refinanced mortgage loan. You may also have the ability to "cash out" some of the built-up equity in your residence, that you may use to take care of higher interest debts, make home improvements, or finance a vacation. With reduced rates, you may also be able to build up home equity more quickly by switching to a shorter-term mortgage loan.
The Cost
As you probably know, you'll have to pay for the the refinance process. With your refinance, you are paying for most of the same things you paid for at the time you obtained your existing mortgage loan. These might include settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.
Do the Math
You might investigate paying points to receive a better interest rate. When you pay (on average) 3% of the loan amount at the start, your savings for the term of the new mortgage can be substantial. Please talk to a tax professional before acting on rumors that the paid points may be deducted on your federal income taxes.
Another cost that borrowers might take into account is that a lower interest rate will lower the interest amount you'll be able to deduct from your federal income taxes. Call us at 4056158543 to help you do the math.
In the end, for most people the amount of up-front costs to refinance are paid back soon in monthly savings. We can help you figure out your options, considering the effect a refinance may have on your taxes, how likely you might be to sell in the next couple of years, and your available cash. Call us at 4056158543 to get you started.
Want to know more about refinancing your home? Call us: 4056158543.