Weighing the Options of Refinancing

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It has been said that only when your new interest is at least 2 points lower, should you refinance your mortgage. That might have been valid years ago, but with refinancing dropping in cost over the last few years, it's a good time to think about a new loan! A refinance is often worth its cost many times over, because of the advantages that may come, as well as a reduced interest rate.

Benefits

When you refinance, you may be able to lower your interest rate and mortgage payment , sometimes considerably. You may also have the option to "cash out" some of the built-up equity in your home, which you may use to consolidate debt, make home improvements, or take a vacation. With lower interest rates, you might also be able to build up home equity faster by changing to a shorter-term mortgage loan.

The Cost

Of course, you'll have some fees and expenses during the process of refinancing. You will have to pay the same sort of fees as with your present mortgage loan. Included in the list will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Do the Math

You could need to pay points (prepaid interest) to gain a better rate of interest. The money you will save on the life of the mortgage loan might be significant if you have paid up front about three percent of the new loan total. You might have heard that these points can be deducted on your income taxes, but since tax regulations can be difficult to keep up with, we urge you to consult with your tax professional before considering this in your calculations.

Speaking of taxes, once your interest rate is reduced, of course you'll also be lowering the paid interest amount that you'll be able to deduct on your federal income taxes. This is one more expense that borrowers consider. We can help you do the math! Call us at 4056158543.

Most people find that the savings each month outweigh the up-front expenses of refinancing. We can help you find out your options, considering the effect a refinance may have on your taxes, whether you are likely to sell your home in the next couple of years, and your money on hand. Call us at 4056158543 to get 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