Is Refinancing Worth the Cost?
 |
 |
 |
In the market for a mortgage loan? We can help! Give us a call at 8165258000. Ready to get started? Apply Now.
|
|
|
|
|
It has been said that only if your new interest will be at least two points below your current rate, should you refinance your loan. Perhaps several years ago that was wise advice, but as refinance costs have been falling recently, it may be time to look into it. A refinanced mortgage loan is often worth its cost many times over, considering the benefits that can come, along with a reduced interest rate.
Benefits from Refinancing
You may be able to bring down your interest rate (sometimes substantially) and have smaller monthly payments with your refinanced loan. You may also have the option to "cash out" some of the built-up equity in your home, which you can use to consolidate debts, add on to your home, or take a vacation. You could have the option to refinance to a shorter-term mortgage loan, giving you the ability to build up your home equity faster.
Fees and Expenses
Of course, you'll have some fees and expenses during your the refinance process. With your refinance, you are paying for basically the same things you paid for at the time you obtained your current mortgage loan. Among these will be settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.
Do the Math
You could need to pay points (prepaid interest) to attain a more favorable interest rate. Your savings over the life of the loan may be substantial if you've paid up front about 3% of the new loan total. You might be told that the points can be tax deductible, but because tax regulations can be ever-changing, please consult with your tax professional before depending on this.
Another thing about taxes is that once you lower your interest rate, of course you will also be reducing the paid interest amount that you'll be able to deduct from your taxes. This is another expense that borrowers take into account. Call us at 8165258000 to help you do the math.
In the end, for most borrowers the amount of initial costs to refinance are paid back very quickly in monthly savings. We'll work with you to determine what loan program is ideal for you, looking at your cash on hand, how likely you are to sell your house in the next few years, and how refinancing may effect your taxes. Call us at 8165258000 to get you started.
Curious about refinancing? Call us: 8165258000.