Is Refinancing Worth the Cost?
 |
 |
 |
Are you looking for a mortgage? We can assist you! Give us a call at 754-202-4376. Ready to get started? Apply Here.
|
|
|
|
|
Some have said that only when your new interest will be at least 2 points lower, should you refinance your mortgage. That could have been valid years ago, but with refinancing dropping in cost in recent years, it's never the wrong time to think about a new mortgage loan! A refinanced mortgage is often worth its cost several times over, because of the advantages that can come, along with a reduced interest rate.
Benefits
When you refinance, you may have the ability to reduce your interest rate and mortgage payment amount, perhaps considerably. Additionally, you could be given the option of pulling out some of your home equity by "cashing out" some money to fix up your home, consolidate debt, or take your family on a vacation. You may have the option to refinance to a shorter-term mortgage, giving you the ability to build your home equity faster.
Fees and Expenses
Of course, you'll have some fees and expenses during the the refinance process. With your refinance, you're paying for basically the same things you were charged for during your existing mortgage. Among these can be settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Doing the Math
You might need to pay discount points (prepaid interest) to get a lower rate of interest. If you pay (on average) three percent of the loan amount up front, your savings for the term of the refinanced mortgage can be substantial. You may have heard that points can be tax deductible, but since tax regulations can be ever-changing, we urge you to consult with a tax professional before considering this in your calculations.
Another cost that borrowers might consider is that a lower rate of interest will lower the interest amount you'll deduct from your taxes. We can help you do the math! Call us at 754-202-4376.
In the end, for most the total of initial costs to refinance will be made up very quickly in monthly savings. We will work with you to figure out which loan program is perfect for you, looking at your cash on hand, the likelihood of selling your residence in the near future, and what effect refinancing will probably have on your taxes. Call us at 754-202-4376 to get started.
Curious about refinancing your home? Call us: 754-202-4376.