Weighing the Options of Refinancing
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It has been said that only in the case your new interest is at least 2 points lower, should you refinance your mortgage. That may have been sound advice years ago, but with refinancing dropping in cost recently, it's never the wrong time to think about a new mortgage loan! Refinancing your mortgage has a variety of benefits that can make it worth the initial expenditure many times over.
Benefits from Refinancing
You might be able to lower your interest rate (sometimes significantly) and reduce your monthly payment amount with a refinanced mortgage loan. You might also be able to "cash out" some of the built-up equity in your home, that you will be able use to consolidate debts, improve your home, or finance a vacation. With reduced rates, you may also be able to build up home equity faster by switching to a shorter-term mortgage.
Of course, you'll have to pay for the process of refinancing. When you refinance, you're paying for basically the same things you were charged for during your current mortgage loan. Among these might be settlement costs, an appraisal, lender's title insurance, underwriting expenses, and so on.
Doing the Math
You might think about paying points to get a reduced interest rate. Your savings over the life of the loan could be substantial if you have paid up front about three percent of the new loan balance. You might have heard that these points may be deducted on your income taxes, but since tax regulations can be ever-changing, please speak with your tax professional before depending on this.
Another cost that borrowers may take into account is that a reduced rate of interest will reduce the interest amount you will be able to deduct from your federal income taxes. Call us at 4357556622 to help you do the math.
Most borrowers find that the savings per month quickly outweigh the up-front expenses of refinancing. We will work with you to figure out which loan program is perfect for you, considering your cash on hand, how likely you are to sell your home in the near future, and how refinancing could effect your taxes. Call us at 4357556622 to get started.