Is Refinancing Worth the Cost?
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Ever heard the old rule of thumb that states you should only consider refinancing if your new interest rate will be at least 2 points under your present rate? Maybe several years ago that was sage advice, but since refinance costs have been getting lower, it could be a good time to look into it. Refinancing has a variety of benefits that often make it worth the initial expenditure many times over.
You may be able to lower your interest rate (sometimes significantly) and make smaller monthly payments with a refinanced mortgage loan. Additionally, you might be given the option of tapping into your home equity by "cashing out" some funds to renovate your home, consolidate debt, or plan a special vacation. You might have the option to refinance to a shorter-term mortgage program, enabling you to build your home equity faster.
Fees and Expenses
Of course, you'll have to pay for the process of refinancing. With your refinance, you're paying for basically the same things you were charged for at the time you got your existing mortgage. These could include settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.
Do the Math
You might consider paying points to reduce your interest rate. When you pay (on average) three percent of the mortgage loan amount initially, the savings for the life of the refinanced mortgage can be great. You might be told that the points may be deducted on your income taxes, but as tax regulations are ever-changing, please speak with your tax professional before making decisions based on this.
Another cost that borrowers might take into account is that a lower rate of interest will lower the interest amount you'll be able to deduct on your federal income taxes. We can help you do the math! Call us at 4056158543.
Most people find that the savings per month balance out the initial cost of a refinance. We can help you figure out your options, considering the effect a refinance may have on your taxes, if you are likely to sell your home in the near future, and your available cash. Call us at 4056158543 to get started.
Want to know more about refinancing? Call us at 4056158543.