Is Refinancing Worth the Cost?
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Looking for a mortgage loan? We will be glad to help! Call us at 4056158543. Ready to get started? Apply Now.
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Have you ever heard the pearl of wisdom that says you should only consider refinancing if your new interest rate is at least two points below your existing one? That may have been true years ago, but since refinancing has been costing less over the last few years, it's never the wrong time to explore the options of a new mortgage loan! Refinancing has some advantages that can make it worth the initial cost many times over.
Benefits from Refinancing
When you refinance, you may have the ability to reduce the interest rate and monthly mortgage payment , perhaps significantly. You also may have the option of tapping into your home equity by "cashing out" some money to fix up your home, consolidate debt, or take your family on a vacation. With lower interest rates, you may also be able to build up home equity faster by changing to a shorter-term loan.
Expenses and Fees
All these benefits do come with some expense, though. You will have the same kinds of expenses and fees as you did with your current home loan. Included in your costs might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
Paying discount points can result in a better interest rate. The money you'll save on the life of the mortgage might be substantial if you've paid up front about three percent of the new loan balance. You may have heard that points may be tax deductible, but since tax regulations can be difficult to keep up with, we urge you to speak with your tax professional before depending on this.
Another thing about taxes is that if 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 federal income taxes. This is another cost that borrowers consider. Call us at 4056158543 to help you do the math.
Most people find that the monthly savings quickly outweigh the initial expenses of a refinance. We will help you find out which program is best for you, considering your cash on hand, the likelihood of selling your residence in the near future, and how refinancing might effect your taxes. Call us at 4056158543 to get started.
Curious about refinancing your home? Give us a call at 4056158543.