Weighing the Options of Refinancing

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Some have said that only if your new interest is at least two points lower, should you refinance your loan. Perhaps that was good advice several years ago, but since refinance costs have been getting lower, it could be a good time to take a serious look. A refinance can be worth its cost several times over, considering the benefits that it brings, as well as a reduced interest rate.


You could be able to bring down your interest rate (sometimes substantially) and have smaller mortgage payments with your refinanced loan. You also may have the option of tapping into your home equity by "cashing out" some money to fix up your home, consolidate debt, or take your family on a vacation. You might be able to refinance into a shorter-term mortgage, giving you the ability to add to your equity faster.

The Cost

Of course, you will have to pay for your the refinance process. You'll have the same kinds of expenses and fees as with your current mortgage loan. Included in your costs can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Do the Math

Paying discount points can get you a better interest rate. If you pay (on average) three percent of the loan amount up front, the savings for the life of the new loan can be substantial. We recommend that you consult with a tax professional before acting on rumors that these paid points may be deducted on your taxes.

Speaking of taxes, when your interest rate is reduced, naturally you will also be reducing the paid interest amount that you can deduct on your taxes. This is another cost that borrowers consider. We can help you do the math! Call us at 754-202-4376.

Ultimately, for most the amount of up-front costs to refinance are paid back very quickly in monthly savings. We can help you find out what your options are, 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 available cash. Call us at 754-202-4376 to get you started.

Curious about refinancing your home? Call us: 754-202-4376.

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