Is Refinancing Worth the Cost?

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Have you ever heard the old rule of thumb that says you should only consider refinancing if the new interest rate is at least two points below your existing rate? Perhaps several years ago that was good advice, but as refinance costs have been getting lower, it could be a good time to take a serious look. A refinanced mortgage loan is often worth its cost many times over, considering the benefits that it brings, as well as a lower interest rate.


When you refinance, you could have the ability to reduce the interest rate and monthly payment , sometimes by a lot. You could also have the option to "cash out" some of your home equity, which you will be able use to consolidate debts, add on to your home, or plan a vacation. With reduced rates, you may also get the chance to build your home equity faster by switching to a shorter term mortgage.

Expenses and Fees

Of course, you'll have some fees and expenses during your process of refinancing. You will have to pay the same kinds of expenses and fees as you did with your existing mortgage. Included in the list will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Doing the Math

Paying discount points can help you attain a lower interest rate. The money you'll save over the life of the mortgage loan could be substantial if you've paid up front about 3% of the new loan total. You might hear that these points may be tax deductible, but as tax regulations can be ever-changing, we urge you to consult a tax professional before depending on this.

Another thing about taxes is that if your interest rate is lowered, it follows that you will also be lowering the interest amount that you'll be able to deduct on your federal income taxes. This is one more expense that some borrowers take into account. Call us at 4056158543 to help you do the math.

In the end, for most borrowers the amount of up-front costs to refinance will be paid back soon in monthly savings. We can help you figure out your options, considering the effect a refinance could have on your taxes, if you are likely to sell your home in the near future, and your cash on hand. Call us at 4056158543 to get you started.

Curious about refinancing? Call us: 4056158543.

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Executive Lending Group

A Division of 1st Capital Mortgage LLC

2401 Tee Circle, STE 102B
Norman, OK 73069