Is Refinancing Worth the Cost?
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In the market for a new mortgage? We can assist you! Give us a call today at 5102009714. Ready to begin? Apply Online Now.
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Ever heard the pearl of wisdom that states you should only refinance if the new interest rate will be at least two points under your present rate? That may have been accurate years ago, but as refinancing has been costing less over the last few years, it is a good time to explore the options of a new mortgage! A refinance is often worth its cost several times over, factoring in the benefits that it brings, along with a reduced interest rate.
Advantages
When you refinance, you could have the ability to reduce the interest rate and monthly payment amount, sometimes significantly. You could also have the ability to "cash out" a portion of the built-up equity in your residence, that you will be able use to take care of higher interest debts, improve your home, or finance a vacation. You might be able to refinance to a shorter-term mortgage program, enabling you to add to your equity quicker.
The Cost
Of course, you'll have some fees and expenses during the process of refinancing. With your refinance, you're paying for most of the same things you were charged for at the time you got your current mortgage loan. Included in the list will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
You could need to pay discount points (prepaid interest) to get a better interest rate. If you pay (on average) three percent of the mortgage loan amount up front, the savings for the term of the new mortgage loan can be substantial. You may be told that these points may be tax deductible, but as tax regulations are ever-changing, please consult with a tax professional before depending on this.
Another thing about taxes is that if your interest rate is reduced, of course you'll also be reducing the interest amount that you'll be able to deduct from your federal income taxes. This is one more cost that some borrowers consider. Call us at 5102009714 to help you do the math.
Most people find that the monthly savings quickly outweigh the initial expenses of refinancing. We will help you find out which mortgage loan program is right for you, looking at your cash on hand, the likelihood of selling your residence in the next few years, and how refinancing may effect your taxes. Call us at 5102009714 to get you started.
Want to know more about refinancing? Call us: 5102009714.