Weighing the Options of Refinancing
 |
 |
 |
Shopping for a mortgage? We'll be glad to answer your questions about your mortgage needs! Give us a call today at 2603382561. Want to get started? Apply Now.
|
|
|
|
|
Ever heard the old rule of thumb that states you should only refinance if the new interest rate is at least two points under your existing rate? That might have been true years ago, but with the fact that refinancing has been costing less recently, it is never the wrong time to think about a new mortgage! A refinance is often worth its cost several times over, factoring in the advantages that can come, as well as a lower interest rate.
Advantages of Refinancing
When you refinance, you might be able to reduce the interest rate and monthly payment amount, perhaps considerably. Additionally, you could have the option of tapping into the equity in your property by "cashing out" some funds to fix up your home, consolidate debt, or take your family on a vacation. With lower rates, you might also be able to build up home equity faster by moving to a shorter term loan.
Expenses and Fees
Of course, you will have to pay for your the refinance process. You will be charged the same sort of fees as you did with your existing mortgage. Included in your costs will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You might consider paying points to reduce your interest rate. If you pay (on average) three percent of the loan amount at the start, your savings for the life of the new loan can be significant. Please talk to a tax professional before acting on rumors that these points paid can be deducted on your taxes.
Another cost that borrowers might take into account is that a reduced rate of interest will reduce the interest amount you will be able to deduct on your federal income taxes. Call us at 2603382561 to help you do the math.
In the end, for most borrowers the total of up-front costs to refinance are paid back very quickly in monthly savings. We'll work with you to determine what mortgage loan program is ideal for you, looking at your cash on hand, the likelihood of selling your residence in the next few years, and the effect refinancing might have on your taxes. Call us at 2603382561 to get you started.
Want to know more about refinancing? Call us: 2603382561.