Is Refinancing Worth the Cost?
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In the market for a new mortgage? We can help! Give us a call today at 9043423622. Ready to get started? Apply Online Now.
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Have you ever heard the old rule of thumb that says you should only consider refinancing if your new interest rate will be at least two points under your current rate? Perhaps several years ago that was sage advice, but as refinance costs have been getting lower, it could be a good time to look into it. A refinanced mortgage loan is often worth its cost many times over, considering the advantages that it brings, as well as a reduced interest rate.
Benefits
When you refinance, you may have the ability to lower the interest rate and mortgage payment , sometimes significantly. You may also be able to "cash out" a portion of the built-up equity in your home, that you are able use to take care of higher interest debts, improve your home, or take a vacation. You could be able to refinance to a shorter-term mortgage loan, enabling you to build your home equity quicker.
The Cost
Of course, you'll have to pay for your process of refinancing. You'll be charged the same sort of expenses and fees as with your current mortgage loan. Among these can be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.
Doing the Math
You might look into paying points to reduce your interest rate. Your savings over the life of the mortgage might be significant if you've paid up front about 3% of the new loan total. You might be told that the points can be deducted on your income taxes, but since tax regulations can be difficult to keep up with, please consult with a tax professional before making decisions based on this.
Another expense that a borrower may take into account is that a lower interest rate will reduce the interest amount you'll be able to deduct on your taxes. Call us at 9043423622 to help you do the math.
All things considered, for most people the total of initial costs to refinance are made up very quickly in monthly savings. We can help you figure out what your options are, considering the effect a refinance could have on your taxes, how likely you may be to sell in the near future, and your money on hand. Call us at 9043423622 to get you started.
Want to know more about refinancing your home? Call us at 9043423622.