Is Refinancing Worth the Cost?
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In the market for a mortgage loan? We can assist you! Call us at 2603382561. Ready to get started? Apply Now.
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Have you ever heard the pearl of wisdom that states you should only consider refinancing if your new interest rate will be at least 2 points lower than your existing one? That may have been sound advice a while back, but with refinancing dropping in cost recently, it is never the wrong time to consider a new mortgage loan! A refinance can be worth its cost many times over, factoring in the benefits that it brings, along with a reduced interest rate.
Advantages
When you refinance, you may be able to lower your interest rate and monthly mortgage payment amount, sometimes considerably. You also could have the option of pulling out some of the equity in your house by "cashing out" some funds to renovate your home, consolidate debt, or plan a special vacation. With lower interest rates, you might also be able to build up home equity more quickly by changing to a shorter term loan.
Fees and Expenses
As you probably know, you'll have some fees and expenses during your process of refinancing. You will pay the same kinds of expenses and fees as with your present mortgage. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
You might offer to pay discount points (prepaid interest) to attain a lower rate of interest. Your savings over the life of the mortgage loan might be significant if you've paid up front about 3% of the new loan balance. You might have heard that points can be deducted on your income taxes, but since tax regulations can be ever-changing, we urge you to consult with your tax professional before depending on this.
Another cost that borrowers might consider is that a lower rate of interest will reduce the interest amount you will be able to deduct on your taxes. We can help you do the math! Call us at 2603382561.
Most people find that the monthly savings balance out the initial expenses of a refinance. We'll work with you to determine what loan program is best for you, considering your cash on hand, how likely you are to sell your house in the near future, and how refinancing could effect your taxes. Call us at 2603382561 to get you started.
Want to know more about refinancing your home? Give us a call: 2603382561.