Is Refinancing Worth the Cost?
 |
 |
 |
Are you looking for a mortgage? We'll be glad to talk about your mortgage needs! Call us at 9722920448. Ready to begin? Apply Online Now.
|
|
|
|
|
It has been said that only if your new interest is at least 2 points under your current rate, should you refinance your mortgage. Perhaps several years ago that was good advice, but as refinance costs have been falling recently, it could be a good time to look into it. Refinancing your mortgage loan has a number of advantages that can make it worth the initial cost several times over.
Advantages
You may be able to lower your interest rate (sometimes by a lot) and make smaller mortgage payments with your refinanced mortgage. Additionally, you might be given the option of tapping into the equity in your property by "cashing out" a sum of money to fix up your home, consolidate debt, or plan a special vacation. You could have the option to refinance to a shorter-term mortgage program, giving you the ability to build up your home equity quicker.
The Cost
Of course, you will have some fees and expenses during the the refinance process. When you refinance, you're paying for basically the same things you were charged for when you obtained your original mortgage. These probably include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Doing the Math
You might need to pay points (prepaid interest) to attain a better interest rate. When you pay (on average) 3% of the loan amount initially, your savings for the term of the new loan can be great. Please consult a tax professional before acting on advice that these points paid may be deducted on your taxes.
Speaking of taxes, once you bring down your interest rate, of course you'll also be lowering the paid interest amount that you may deduct from your federal income taxes. This is another expense that some borrowers take into consideration. We can help you do the math! Call us at 9722920448.
Most people find that the monthly savings balance out the initial expenses of a refinance. We will work with you to determine what mortgage loan program is right for you, taking into account your cash on hand, how likely you are to sell your residence in the near future, and how refinancing may effect your taxes. Call us at 9722920448 to get you started.
Curious about refinancing? Call us: 9722920448.