Is Refinancing Worth the Cost?
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Shopping for a mortgage loan? We can help! Give us a call today at 6507631924. Ready to begin? Apply Now.
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It has been said that only if your new interest will be at least two points lower, should you refinance your loan. Maybe several years ago that was wise advice, but as refinance costs have been getting lower, it could be a good time to take a serious look. A refinanced mortgage can be worth its cost many times over, factoring in the advantages that it brings, along with a reduced interest rate.
Benefits
You might be able to lower your interest rate (sometimes by a lot) and reduce your monthly mortgage payment amount with a refinanced mortgage. You may also have the option to "cash out" some of the built-up equity in your residence, which you are able use to consolidate debts, improve your home, or plan a vacation. You could have the option to refinance into a shorter-term mortgage, giving you the ability to build up your home equity faster.
Fees and Expenses
All of these benefits do come with some expense, though. With your refinance, you are paying for many of the same things you paid for during your original mortgage loan. Included in the list will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You could need to pay discount points (prepaid interest) to attain a better interest rate. When you pay (on average) 3% of the loan amount at the start, the savings for the term of the new mortgage loan can be great. We recommend that you consult a tax professional before acting on rumors that the paid points may be deducted on your taxes.
Another thing about taxes is that once your interest rate is lowered, of course you will 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 account. Call us at 6507631924 to help you do the math.
Most borrowers find that the savings per month balance out the initial expenses of refinancing. We can help you explore your options, considering the effect a refinance may have on your taxes, if you are likely to sell your home in the next couple of years, and your cash on hand. Call us at 6507631924 to get you started.
Curious about refinancing? Call us: 6507631924.