When is Refinancing Worth it?

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Some have said that only if your new interest will be at least two points below your current rate, should you refinance your mortgage. Maybe that was good advice a number of years ago, but as refinance costs have been getting lower, it may be a good time to look into it. Refinancing has a number of benefits that will often make it worth the up-front expenditure several times over.

Benefits

When you refinance, you may have the ability to lower your interest rate and monthly mortgage payment , sometimes by a lot. You may also have the ability to "cash out" a portion of your equity, that you may use to consolidate debt, add on to your home, or finance a vacation. You could be able to refinance to a shorter-term mortgage loan, giving you the ability to build your equity quicker.

Expenses and Fees

Of course, you'll have some fees and expenses during your the refinance process. You'll be charged the same kinds of fees as with your present home loan. Among these will be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.

Doing the Math

You might investigate paying points to reduce your interest rate. If you pay (on average) 3% of the loan amount initially, your savings for the life of the new mortgage loan can be great. We recommend that you consult a tax professional before acting on advice that any points paid may be deducted on your taxes.

One more expense that borrowers might consider is that a reduced rate of interest will lower the interest amount you will be able to deduct on your federal income taxes. We can help you do the math! Call us at (904) 342-3622.

All things considered, for most the total of initial costs to refinance will be made up soon in savings each month. We can help you explore what your options are, considering the effect a refinance could have on your taxes, whether you are likely to sell your home in the next couple of years, and your available cash. Call us at (904) 342-3622 to get you started.

Curious about refinancing? Call us: (904) 342-3622.

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2800 North Fifth Street Suite 301B
St. Augustine, FL 32084