Is Refinancing Worth the Cost?
In the market for a new mortgage? We can assist you! Call us at 754-202-4376. Want to get started? Apply Here.
It has been said that only when your new interest is at least 2 points lower, should you refinance your mortgage. That may have been true years ago, but as refinancing has been costing less recently, it is a good time to think about a new loan! A refinance may be worth its cost several times over, considering the benefits that may come, along with a reduced interest rate.
Advantages of Refinancing
You may be able to lower your interest rate (sometimes substantially) and have smaller mortgage payments with a refinanced loan. Additionally, you could be given the option of pulling out some of your home equity by "cashing out" a sum of money to fix up your home, consolidate debt, or plan a special vacation. You might have the option to refinance into a shorter-term mortgage program, giving you the ability to build your home equity quicker.
Fees and Expenses
Of course, you will have some fees and expenses during your the refinance process. When you refinance, you are paying for most of the same things you paid for at the time you got your existing mortgage loan. Included in your costs might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
Paying points can result in a better interest rate. Your savings over the life of the mortgage might be substantial if you have paid up front about three percent of the new loan balance. Please consult with a tax professional before acting on rumors that any points paid may be deducted on your taxes.
Speaking of taxes, once you lower your interest rate, it follows that you'll also be lowering the interest amount that you may deduct from your taxes. This is one more cost that some borrowers take into account. We can help you do the math! Call us at 754-202-4376.
Most people find that the savings each month outweigh the initial cost of a refinance. We will work with you to find out what loan program is best for you, taking into account your cash on hand, how likely you are to sell your residence in the near future, and what effect refinancing may have on your taxes. Call us at 754-202-4376 to get started.
Want to know more about refinancing? Call us at 754-202-4376.