Weighing the Options of Refinancing
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Are you looking for a new mortgage loan? We will be glad to assist you! Call us at 2603382561. Ready to get started? Apply Here.
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Ever hear the pearl of wisdom that states you should only refinance if your new interest rate will be at least 2 points lower than your current rate? That might have been sound advice a while back, but with refinancing dropping in cost over the last few years, it is never the wrong time to think about a new mortgage! A refinanced mortgage is often worth its cost several times over, factoring in the advantages that it brings, along with a lower interest rate.
Advantages of Refinancing
When you refinance, you may have the ability to lower your interest rate and monthly payment amount, sometimes by a lot. Additionally, you might be given the option of pulling out some of your home equity by "cashing out" some money to remodel your home, consolidate debt, or take your family on a vacation. You could have the option to refinance to a shorter-term mortgage loan, giving you the ability to build your equity faster.
The Cost
All these advantages do come with some expense, though. You'll pay the same kinds of fees as with your present home loan. These might include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.
Do the Math
You could offer to pay points (prepaid interest) to get a better interest rate. Your savings over the life of the loan might be significant if you have paid up front about three percent of the new loan total. Please consult a tax professional before acting on hear-say that these paid points can be deducted on your taxes.
Another thing about taxes is that if you bring down your interest rate, of course you'll also be lowering the paid interest amount that you'll be able to deduct on your taxes. This is one more cost that borrowers take into consideration. Call us at 2603382561 to help you do the math.
Most people find that the savings per month balance out the initial cost of refinancing. We will help you find out what mortgage loan program is ideal for you, considering your cash on hand, how likely you are to sell 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 at 2603382561.