Weighing the Options of Refinancing
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Some have said that only in the case your new interest will be at least 2 points lower, should you refinance your mortgage. That may have been accurate years ago, but with refinancing dropping in cost over the last few years, it's never the wrong time to consider a new mortgage loan! A refinanced loan is often worth its cost several times over, considering the benefits that it brings, as well as a lower interest rate.
Advantages of Refinancing
When you refinance, you may have the ability to lower your interest rate and monthly mortgage payment amount, perhaps considerably. You also might be given the option of pulling out some of your home equity by "cashing out" some funds to renovate your home, consolidate debt, or plan a special vacation. You may have the option to refinance into a shorter-term mortgage loan, enabling you to build up your equity quicker.
Expenses and Fees
All of these benefits do come with some expense, though. You will have the same kinds of fees as you did with your current mortgage. Among these can be settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.
Do the Math
You might investigate paying points to get a lower interest rate. The money you will save on the life of the mortgage might be significant if you've paid up front about three percent of the new loan total. Please consult with a tax professional before acting on advice that any points paid can be deducted on your federal income taxes.
Another expense that a borrower might consider is that a lower interest rate will reduce the interest amount you will deduct from your federal income taxes. We can help you do the math! Call us at 4056158543.
All things considered, for most the amount of initial costs to refinance are made up soon in savings each month. We can help you find out what your options are, considering the effect a refinance might have on your taxes, how likely you may be to sell in the next couple of years, and your cash on hand. Call us at 4056158543 to get started.
Curious about refinancing? Give us a call at 4056158543.