When is Refinancing Worth it?

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It has been said that only when your new interest is at least 2 points lower, should you refinance your loan. That could have been sound advice years ago, but with refinancing dropping in cost recently, it is a good time to explore the options of a new loan! A refinanced mortgage may be worth its cost many times over, considering the advantages that it brings, along with a lower interest rate.


When you refinance, you could have the ability to lower your interest rate and monthly payment amount, perhaps by a lot. Additionally, you might be given the option of pulling out some of your home equity by "cashing out" a sum of money to remodel your home, consolidate debt, or take your family on a vacation. With lower interest rates, you might also be able to build up home equity faster by moving to a shorter-term mortgage.

Expenses and Fees

All of these advantages do come with some expense, though. You will pay the same sort of expenses and fees as you did with your present mortgage. Included in your costs might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Do the Math

You could need to pay discount points (prepaid interest) to gain a more favorable rate of interest. If you pay (on average) 3% of the mortgage loan amount at the start, your savings for the life of the new mortgage can be great. Please talk to a tax professional before acting on rumors that these paid points can be deducted on your taxes.

Another expense that borrowers might take into account is that a reduced interest rate will lower the interest amount you will deduct on your taxes. We can help you do the math! Call us at 4056158543.

All things considered, for most borrowers the total of up-front costs to refinance will be paid back soon in monthly savings. We can help you explore what your options are, considering the effect a refinance could have on your taxes, how likely you might be to sell in the near future, and your money on hand. Call us at 4056158543 to get you started.

Curious about refinancing your home? Give us a call: 4056158543.

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Executive Lending Group

A Division of 1st Capital Mortgage LLC

2401 Tee Circle, STE 102B
Norman, OK 73069