Weighing the Options of Refinancing
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In the market for a new mortgage? We will be glad to assist you! Give us a call today at 2603382561. Ready to begin? Apply Online Now.
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Ever heard the old rule of thumb that states you should only refinance if your new interest rate will be at least two points under your current one? That may have been true years ago, but since refinancing has been costing less in recent years, it's a good time to explore the options of a new mortgage loan! Refinancing your mortgage has various benefits that often make it worth the initial cost a few times over.
Advantages
When you refinance, you could have the ability to reduce your interest rate and monthly payment amount, perhaps considerably. You also may be given the option of pulling out some of the equity in your house by "cashing out" a sum of money to remodel your home, consolidate debt, or plan a special vacation. With lower rates, you might also get the chance to build up home equity faster by moving to a shorter term mortgage.
The Cost
As you probably expect, you will have some fees and expenses during the process of refinancing. You will be charged the same kinds of fees as with your current mortgage loan. Among these will be settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.
Do the Math
You might need to pay points (prepaid interest) to get a more favorable interest rate. The money you'll save over the life of the mortgage loan might be significant if you have paid up front about 3% of the new loan total. Please talk to a tax professional before acting on rumors that the points paid may be deducted on your federal income taxes.
One more expense that a borrower might take into account is that a lower rate of interest will reduce the interest amount you'll deduct from your taxes. Call us at 2603382561 to help you do the math.
Most people find that the monthly savings balance out the up-front expenses of a refinance. We can help you explore your options, considering the effect a refinance could have on your taxes, how likely you may be to sell in the near future, and your available cash. Call us at 2603382561 to get you started.
Curious about refinancing? Call us at 2603382561.