Is Refinancing Worth the Cost?
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It has been said that only in the case your new interest will be at least two points under your current rate, should you refinance your loan. Maybe several years ago that was sage advice, but since refinance costs have been falling recently, it could be time to take a serious look. A refinanced mortgage can be worth its cost many times over, because of the advantages that it brings, along with a reduced interest rate.
Advantages of Refinancing
When you refinance, you might have the ability to lower the interest rate and monthly payment , perhaps significantly. You could also be able to "cash out" some of your home equity, that you are able use to take care of higher interest debt, add on to your home, or take a vacation. You could have the option to refinance to a shorter-term mortgage loan, enabling you to build your home equity quicker.
As you probably expect, you'll have some fees and expenses during the process of refinancing. You will pay the same kinds of fees as with your present mortgage. Among these might be settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.
Doing the Math
You might consider paying points to reduce your interest rate. The money you'll save over the life of the loan could be substantial if you've paid up front about three percent of the new loan balance. Please talk to a tax professional before acting on advice that the paid points can be deducted on your taxes.
Another cost that a borrower might consider is that a lower 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 (260) 338-2561.
Most people find that the monthly savings quickly outweigh the initial expenses of a refinance. We can help you figure out your options, considering the effect a refinance may have on your taxes, how likely you might be to sell in the next couple of years, and your available cash. Call us at (260) 338-2561 to get you started.
Want to know more about refinancing? Call us: (260) 338-2561.