Is Refinancing Worth the Cost?

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Some have said that only if your new interest is at least two points below your current rate, should you refinance your mortgage. That could have been true years ago, but with the fact that refinancing has been costing less in recent years, it is a good time to explore the options of a new mortgage loan! A refinance is often worth its cost several times over, considering the advantages that it brings, as well as a reduced interest rate.

Advantages

When you refinance, you might be able to reduce your interest rate and mortgage payment amount, sometimes considerably. Additionally, you might 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 could have the option to refinance into a shorter-term mortgage loan, enabling you to build your home equity quicker.

Expenses and Fees

Of course, you will have to pay for your the refinance process. You'll be charged the same sort of fees as with your existing mortgage. Included in the list can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Do the Math

Paying discount points can result in a lower interest rate. If you pay (on average) three percent of the mortgage loan amount at the start, your savings for the term of the refinanced loan can be significant. You may be told that the points can be tax deductible, but as tax regulations can be difficult to keep up with, please consult with your tax professional before depending on this.

Another thing about taxes is that when you bring down your interest rate, naturally you'll also be reducing the interest amount that you may deduct on your taxes. This is another expense that some borrowers take into consideration. Call us at 9043423622 to help you do the math.

All things considered, for most people the amount of initial costs to refinance are paid back very quickly in savings each month. We can help you find out your options, considering the effect a refinance could have on your taxes, whether you are likely to sell your home in the near future, and your available cash. Call us at 9043423622 to get started.

Curious about refinancing your home? Give us a call: 9043423622.

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159 Hampton Point Drive Suite 4
St. Augustine, FL 32092