Is Refinancing Worth the Cost?

In the market for a new mortgage loan? We will be glad to help! Give us a call today at 6507631924. Ready to begin? Apply Now.

Ever heard the pearl of wisdom that says you should only consider refinancing if your new interest rate is at least two points below your present rate? That may have been accurate years ago, but with refinancing dropping in cost recently, it's a good time to explore the options of a new loan! A refinance is often worth its cost many times over, factoring in the benefits that can come, in addition to a reduced interest rate.

Benefits from Refinancing

You could be able to lower your interest rate (sometimes by a lot) and have smaller monthly payments with a refinanced mortgage. You also could have the option of tapping into your home equity by "cashing out" a sum of money to renovate your home, consolidate debt, or take your family on a vacation. You might have the option to refinance into a shorter-term mortgage program, enabling you to add to your home equity quicker.

Expenses and Fees

Of course, you'll have to pay for the process of refinancing. You'll be charged the same kinds of fees as you did with your current mortgage loan. These might include settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.

Doing the Math

You might offer to pay points (prepaid interest) to get a lower interest rate. Your savings over the life of the mortgage may be substantial if you've paid up front about three percent of the new loan balance. Please consult with a tax professional before acting on rumors that these paid points can be deducted on your taxes.

Speaking of taxes, when you bring down your interest rate, it follows that you'll also be lowering the interest amount that you'll be able to deduct on your federal income taxes. This is another expense that borrowers take into consideration. We can help you do the math! Call us at 6507631924.

Ultimately, for most people the amount of initial costs to refinance will be paid back soon in savings each month. We'll work with you to find out what loan program is the right fit for you, taking into account your cash on hand, how likely you are to sell your home in the near future, and the effect refinancing might have on your taxes. Call us at 6507631924 to get you started.

Curious about refinancing? Give us a call: 6507631924.

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Norcal Capital Group, Inc

1369 El Camino Real
Millbrae, CA 94030