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 below your current rate, should you refinance your loan. That could have been valid a while back, but as refinancing has been costing less recently, it's a good time to explore the options of a new loan! A refinance is often worth its cost several times over, factoring in the advantages that it brings, in addition to a reduced interest rate.


When you refinance, you may be able to lower the interest rate and monthly mortgage payment , perhaps significantly. You also might have the option of pulling out some of your home equity by "cashing out" some money to remodel your home, consolidate debt, or plan a special vacation. You might be able to refinance into a shorter-term mortgage program, giving you the ability to build your home equity faster.

Fees and Expenses

As you probably know, you'll have some fees and expenses during the process of refinancing. With your refinance, you're paying for most of the same things you paid for during your original mortgage. These could include settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and so on.

Doing the Math

Paying discount points can result in a better interest rate. Your savings on the life of the loan may be significant if you've paid up front about 3% of the new loan total. You might be told that these points can be tax deductible, but because tax regulations can be difficult to keep up with, please consult with your tax professional before depending on this.

Speaking of taxes, if your interest rate is reduced, of course you'll also be reducing the paid interest amount that you can deduct on your federal income taxes. This is one more cost that borrowers consider. Call us at 2603382561 to help you do the math.

Most people find that the savings per month quickly outweigh the up-front expenses of refinancing. We will work with you to figure out what mortgage loan program is perfect for you, looking at your cash on hand, the likelihood of selling your home in the next few years, and the effect refinancing may have on your taxes. Call us at 2603382561 to get started.

Want to know more about refinancing? Call us: 2603382561.

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