Weighing the Options of Refinancing

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Some have said that only if your new interest will be at least two points under your current rate, should you refinance your mortgage. That may have been true a while back, but with refinancing dropping in cost over the last few years, it's never the wrong time to think about a new mortgage loan! Refinancing has a number of benefits that can make it worth the up-front expenditure several times over.


When you refinance, you might be able to lower the interest rate and monthly mortgage payment amount, sometimes considerably. Additionally, you may be given the option of tapping into the equity in your home by "cashing out" some funds to renovate your home, consolidate debt, or take your family on a vacation. With lower interest rates, you might also be able to build up home equity more quickly by moving to a shorter term mortgage.

Fees and Expenses

Of course, you will have some fees and expenses during your the refinance process. You'll pay the same sort of expenses and fees as you did with your existing mortgage. Included in the list can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Doing the Math

You might need to pay points (prepaid interest) to gain a more favorable rate of interest. When you pay (on average) 3% of the loan amount up front, the savings for the life of the refinanced mortgage can be significant. Please talk to a tax professional before acting on advice that these points paid may be deducted on your taxes.

Another cost that a borrower may take into account is that a reduced rate of interest will reduce the interest amount you will deduct on your taxes. Call us at 6507631924 to help you do the math.

Most borrowers find that the savings per month quickly balance out the up-front expenses of refinancing. We will help you figure out what mortgage program is the right fit for you, taking into account your cash on hand, the likelihood of selling your home in the next few years, and what effect refinancing may have on your taxes. Call us at 6507631924 to get started.

Curious about refinancing your home? Call us at 6507631924.

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Norcal Capital Group, Inc

1369 El Camino Real
Millbrae, CA 94030