Is Refinancing Worth the Cost?

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Ever heard the pearl of wisdom that states you should only consider refinancing if your new interest rate is at least 2 points under your present one? Perhaps several years ago that was wise advice, but as refinance costs have been falling recently, it could be a good time to look into it. A refinanced mortgage can be worth its cost many times over, considering the benefits that it brings, along with a lower interest rate.


When you refinance, you may be able to reduce your interest rate and mortgage payment , sometimes considerably. You also may have the option of pulling out some of the equity in your home by "cashing out" some funds to renovate your home, consolidate debt, or take your family on a vacation. You could have the option to refinance to a shorter-term mortgage program, giving you the ability to build your equity faster.

The Cost

As you probably expect, you'll have some fees and expenses during your the refinance process. You will pay the same kinds of expenses and fees as you did with your current mortgage. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Do the Math

You might offer to pay points (prepaid interest) to attain a lower rate of interest. When you pay (on average) three percent of the loan amount at the start, the savings for the term of the new mortgage can be substantial. You may have heard that these points can be tax deductible, but as tax regulations are ever-changing, please consult with a tax professional before considering this in your calculations.

One more cost that borrowers may take into account is that a lower interest rate will reduce the interest amount you will deduct from your taxes. Call us at 4056158543 to help you do the math.

Most borrowers find that the monthly savings balance out the up-front cost of refinancing. We can help you explore 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.

Want to know more about refinancing? Give us a call at 4056158543.

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Executive Lending Group

A Division of 1st Capital Mortgage LLC

2401 Tee Circle, STE 102B
Norman, OK 73069