Is Refinancing Worth the Cost?
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In the market for a new mortgage? We'd be thrilled to discuss our mortgage offerings! Call us at 6507631924. Ready to get started? Apply Now.
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It has been said that only when your new interest is at least 2 points lower, should you refinance your loan. That may have been true a while back, but with refinancing dropping in cost recently, it is a good time to think about a new loan! A refinance is often worth its cost several times over, factoring in the benefits that it brings, along with a lower interest rate.
Benefits
You could be able to lower your interest rate (sometimes significantly) and make smaller mortgage payments with your refinanced mortgage loan. Additionally, you may be given the option of tapping into the equity in your house by "cashing out" some funds to renovate your home, consolidate debt, or take your family on a vacation. With reduced interest rates, you might also get the chance to build up home equity more quickly by changing to a shorter term mortgage loan.
Expenses and Fees
Of course, you will have some fees and expenses during the the refinance process. With your refinance, you are paying for a lot of the same things you paid for when you obtained your existing mortgage loan. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
You might need to pay points (prepaid interest) to gain a lower rate of interest. When you pay (on average) 3% of the mortgage loan amount at the start, the savings for the life of the new mortgage can be great. You may hear that the points may be deducted on your income taxes, but as tax regulations can be difficult to keep up with, we urge you to consult with your tax professional before depending on this.
Speaking of taxes, once you bring down your interest rate, it follows that you will also be lowering the interest amount that you'll be able to deduct from your federal income taxes. This is one more cost that borrowers take into account. We can help you do the math! Call us at 6507631924.
All things considered, for most the total of initial costs to refinance will be made up soon in savings each month. We can help you explore your options, considering the effect a refinance might have on your taxes, how likely you may be to sell in the near future, and your money on hand. Call us at 6507631924 to get you started.
Want to know more about refinancing? Give us a call: 6507631924.