Weighing the Options of Refinancing
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Some have said that only when your new interest is at least two points lower, should you refinance your loan. That could have been sound advice years ago, but with refinancing dropping in cost in recent years, it's never the wrong time to consider a new mortgage loan! Refinancing has a number of benefits that often make it worth the initial expenditure several times over.
Benefits
When you refinance, you may be able to lower your interest rate and mortgage payment , perhaps by a lot. You could also have the option to "cash out" some of your home equity, which you may use to take care of higher interest debt, improve your home, or finance a vacation. You could have the option to refinance into a shorter-term mortgage, giving you the ability to add to your equity faster.
The Cost
Of course, you will have some fees and expenses during the the refinance process. You will have to pay the same kinds of expenses and fees as with your existing home loan. Among these will be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.
Doing the Math
You might think about paying points to receive a better interest rate. Your savings on the life of the loan might be significant if you've paid up front about 3% of the new loan total. You might be told that the points can be deducted on your income taxes, but as tax regulations can be difficult to keep up with, we urge you to consult with a tax professional before considering this in your calculations.
Another thing about taxes is that when you bring down your interest rate, of course you will also be lowering the interest amount that you may deduct on your federal income taxes. This is one more expense that borrowers consider. Call us at 4056158543 to help you do the math.
Ultimately, for most the amount of up-front costs to refinance will be paid back very quickly in monthly savings. We'll help you determine what mortgage loan program is the best fit for you, taking into account your cash on hand, the likelihood of selling your house in the next few years, and what effect refinancing might have on your taxes. Call us at 4056158543 to get you started.
Want to know more about refinancing? Call us: 4056158543.