Is Refinancing Worth the Cost?
Shopping for a mortgage? We will be glad to assist you! Give us a call at 754-202-4376. Ready to begin? Apply Here.
It has been said that only if your new interest is at least 2 points under your current rate, should you refinance your mortgage. Maybe several years ago that was sage advice, but since refinance costs have been falling recently, it may be time to take a serious look. A refinanced loan is often worth its cost several times over, because of the advantages that come, in addition to a lower interest rate.
Benefits from Refinancing
When you refinance, you could be able to lower the interest rate and monthly payment , perhaps significantly. Additionally, you might be given the option of tapping into the equity in your house by "cashing out" some funds to remodel your home, consolidate debt, or take your family on a vacation. With reduced rates, you may also get the chance to build your home equity more quickly by switching to a shorter-term mortgage loan.
Expenses and Fees
As you probably know, you'll have to pay for your the refinance process. With your refinance, you're paying for basically the same things you were charged for at the time you got your existing mortgage. Included in the list can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You might consider paying points to reduce your interest rate. When you pay (on average) three percent of the loan amount initially, the savings for the life of the refinanced mortgage loan can be substantial. We recommend that you consult with a tax professional before acting on hear-say that any points paid may be deducted on your taxes.
Another thing about taxes is that when your interest rate is reduced, it follows that you'll also be reducing the interest amount that you'll be able to deduct on your federal income taxes. This is another cost that borrowers take into consideration. We can help you do the math! Call us at 754-202-4376.
Most people find that the savings per month balance out the initial expenses of refinancing. We can help you figure out what your options are, considering the effect a refinance may have on your taxes, how likely you might be to sell in the next couple of years, and your cash on hand. Call us at 754-202-4376 to get you started.
Curious about refinancing your home? Call us: 754-202-4376.