Is Refinancing Worth the Cost?
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Are you looking for a mortgage? We'll be glad to talk about our mortgage offerings! Give us a call today at 8047689519. Ready to begin? Apply Now.
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It has been said that only if your new interest is at least 2 points below your current rate, should you refinance your loan. That could have been valid years ago, but since refinancing has been costing less recently, it is a good time to consider a new loan! A refinance can be worth its cost several times over, factoring in the advantages that it brings, in addition to a lower interest rate.
Benefits
You may be able to bring down your interest rate (sometimes by a lot) and make smaller monthly payments with your refinanced mortgage. You could also have the ability to "cash out" some of the built-up equity in your home, which you can use to take care of higher interest debts, make home improvements, or plan a vacation. You might be able to refinance to a shorter-term mortgage, enabling you to build up your home equity faster.
Fees and Expenses
All these advantages do come with some expense, though. You'll pay the same kinds of expenses and fees as you did with your existing mortgage. Among these might be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.
Doing the Math
Paying points can help you attain a better interest rate. If you pay (on average) 3% of the mortgage loan amount up front, your savings for the life of the refinanced mortgage can be significant. Please talk to a tax professional before acting on advice that these points paid may be deducted on your taxes.
One more expense that a borrower might take into account is that a reduced rate of interest will lower the interest amount you will be able to deduct from your federal income taxes. We can help you do the math! Call us at 8047689519.
All things considered, for most people the amount of up-front costs to refinance will be paid back very quickly in savings each month. We will work with you to determine what program is ideal for you, taking into account your cash on hand, how likely you are to sell your home in the next few years, and how refinancing might effect your taxes. Call us at 8047689519 to get started.
Curious about refinancing? Call us at 8047689519.
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