Is Refinancing Worth the Cost?

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It has been said that only if your new interest is at least 2 points under your current rate, should you refinance your loan. That might have been valid years ago, but with the fact that refinancing has been costing less recently, it is a good time to explore the options of a new mortgage! Refinancing your loan has a variety of advantages that can make it worth the up-front cost many times over.


You could be able to bring down your interest rate (sometimes substantially) and have smaller monthly payments with a refinanced loan. You might also have the option to "cash out" a portion of the built-up equity in your residence, that you are able use to take care of higher interest debt, improve your home, or finance a vacation. You may be able to refinance to a shorter-term mortgage program, giving you the ability to add to your home equity faster.

The Cost

Of course, you'll have some fees and expenses during your process of refinancing. You'll pay the same types of fees as you did with your present home loan. Among these will be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.

Do the Math

You might investigate paying points to receive a lower interest rate. When you pay (on average) 3% of the loan amount initially, your savings for the life of the new loan can be great. Please talk to a tax professional before acting on rumors that the points paid may be deducted on your taxes.

Another thing about taxes is that once your interest rate is reduced, it follows that you'll also be reducing the interest amount that you'll be able to deduct from your federal income taxes. This is another expense that borrowers take into account. We can help you do the math! Call us at (816) 525-8000.

Ultimately, for most the total of initial costs to refinance are made up very quickly in savings each month. We'll help you figure out which program is right for you, looking at your cash on hand, how likely you are to sell your residence in the near future, and how refinancing can effect your taxes. Call us at (816) 525-8000 to get you started.

Curious about refinancing? Call us at (816) 525-8000.

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