Is Refinancing Worth the Cost?
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Shopping for a mortgage? We will be glad to help! Call us at 4056158543. Ready to get started? Apply Here.
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It has been said that only if your new interest will be at least 2 points lower, should you refinance your loan. Maybe that was sound advice a number of years ago, but since refinance costs have been getting lower, it may be a good time to look into it. A refinanced mortgage is often worth its cost several times over, because of the benefits that may come, in addition to a lower interest rate.
Benefits from Refinancing
You might be able to bring down your interest rate (sometimes significantly) and make smaller monthly payments with your refinanced mortgage. You may also have the option to "cash out" some of your home equity, that you may use to take care of higher interest debts, make home improvements, or take a vacation. You might be able to refinance into a shorter-term mortgage, enabling you to build your equity faster.
The Cost
Of course, you will have to pay for the the refinance process. You will pay the same kinds of fees as you did with your existing home loan. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You could offer to pay points (prepaid interest) to gain a lower rate of interest. If you pay (on average) three percent of the mortgage loan amount at the start, your savings for the term of the new mortgage can be great. We recommend that you talk to a tax professional before acting on hear-say that these paid points can be deducted on your federal income taxes.
An additional expense that a borrower may take into account is that a reduced rate of interest will lower the interest amount you will be able to deduct on your federal income taxes. We can help you do the math! Call us at 4056158543.
Most borrowers find that the savings each month outweigh the initial cost of a refinance. We can help you find out what your options are, considering the effect a refinance could have on your taxes, if you are likely to sell your home in the next couple of years, and your available cash. Call us at 4056158543 to get you started.
Want to know more about refinancing your home? Give us a call: 4056158543.