Is Refinancing Worth the Cost?
In the market for a new mortgage loan? We can assist you! Give us a call today at 877-310-6200. Ready to begin? Apply Now.
Ever heard the pearl of wisdom that says you should only consider refinancing if your new interest rate will be at least 2 points under your present rate? Maybe several years ago that was good advice, but as refinance costs have been getting lower, it could be time to take a serious look. Refinancing your mortgage loan has a number of advantages that often make it worth the up-front expenditure many times over.
Benefits from Refinancing
You may be able to lower your interest rate (sometimes substantially) and make smaller mortgage payments with your refinanced mortgage. You may also be able to "cash out" a portion of your home equity, which you are able use to consolidate debt, improve your home, or take a vacation. You might have the option to refinance to a shorter-term mortgage program, enabling you to build up your equity faster.
Expenses and Fees
Of course, you'll have some fees and expenses during your the refinance process. You will have the same types of expenses and fees as with your present mortgage. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
You might investigate paying points to reduce your interest rate. If you pay (on average) 3% of the mortgage loan amount at the start, the savings for the life of the refinanced loan can be substantial. We recommend that you consult a tax professional before acting on advice that any points paid can be deducted on your federal income taxes.
An additional cost that a borrower may take into account is that a reduced interest rate will reduce the interest amount you will deduct from your taxes. We can help you do the math! Call us at 877-310-6200.
Most borrowers find that the monthly savings outweigh the initial cost of refinancing. We can help you find out what your options are, considering the effect a refinance might have on your taxes, whether you are likely to sell your home in the near future, and your cash on hand. Call us at 877-310-6200 to get started.
Want to know more about refinancing your home? Call us at 877-310-6200.
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