Is Refinancing Worth the Cost?
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In the market for a mortgage loan? We will be glad to help! Give us a call at 6507631924. Want to get started? Apply Here.
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Some have said that only when your new interest will be at least two points below your current rate, should you refinance your loan. Maybe that was sound advice several years ago, but since refinance costs have been falling recently, it may be a good time to take a serious look. Refinancing has some advantages that can make it worth the up-front cost a few times over.
Advantages
You may be able to lower your interest rate (sometimes by a lot) and reduce your monthly payment amount with a refinanced mortgage. Additionally, you may have the option of pulling out some of the equity in your house by "cashing out" a sum of money to renovate your home, consolidate debt, or plan a special vacation. You could have the option to refinance to a shorter-term mortgage loan, giving you the ability to add to your equity faster.
Fees and Expenses
Of course, you will have to pay for your the refinance process. When you refinance, you are paying for basically the same things you were charged for during your existing mortgage. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Doing the Math
Paying points can get you a lower interest rate. When you pay (on average) three percent of the loan amount up front, your savings for the life of the refinanced mortgage loan can be great. You may hear that these points can be tax deductible, but since tax regulations can be ever-changing, we urge you to consult with a tax professional before depending on this.
An additional cost that a borrower may consider is that a lower rate of interest will reduce the interest amount you'll deduct from your taxes. Call us at 6507631924 to help you do the math.
Ultimately, for most people the amount of up-front costs to refinance are made up very quickly in savings each month. We can help you find out what your options are, considering the effect a refinance may have on your taxes, how likely you may be to sell in the near future, and your available cash. Call us at 6507631924 to get started.
Curious about refinancing? Give us a call at 6507631924.