When is Refinancing Worth it?

Shopping for a mortgage loan? We can help! Give us a call today at 6507631924. Ready to begin? Apply Here.

It has been said that only if your new interest is at least two points under your current rate, should you refinance your mortgage. That may have been valid years ago, but with refinancing dropping in cost over the last few years, it's a good time to explore the options of a new loan! Refinancing has various benefits that often make it worth the initial expenditure many times over.

Benefits

You may be able to bring down your interest rate (sometimes by a lot) and make smaller mortgage payments with a refinanced mortgage loan. You also may have the option of tapping into the equity in your property by "cashing out" some funds to renovate your home, consolidate debt, or plan a special vacation. You could have the option to refinance into a shorter-term mortgage, giving you the ability to build your equity faster.

Expenses and Fees

All these advantages do come with some expense, though. You'll have the same kinds of fees as you did with your current home loan. Included in the list can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Do the Math

Paying discount points can result in a lower interest rate. Your savings over the life of the mortgage might be substantial if you've paid up front about 3% of the new loan total. You might have heard that points can be tax deductible, but since tax regulations are ever-changing, please consult with your tax professional before considering this in your calculations.

One more cost that a borrower might take into account is that a reduced interest rate will reduce the interest amount you'll be able to deduct from your taxes. We can help you do the math! Call us at 6507631924.

In the end, for most borrowers the total of up-front costs to refinance are paid back very quickly in monthly savings. We will work with you to figure out what program is perfect for you, taking into account your cash on hand, the likelihood of selling your house in the next few years, and how refinancing could effect your taxes. Call us at 6507631924 to get started.

Curious about refinancing your home? Call us: 6507631924.

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Norcal Capital Group, Inc

1369 El Camino Real
Millbrae, CA 94030