Is Refinancing Worth the Cost?
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Shopping for a mortgage loan? We can assist you! Give us a call at 4357556622. Ready to begin? Apply Online Now.
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It has been said that only in the case your new interest will be at least 2 points lower, should you refinance your mortgage. That might have been good advice years ago, but with refinancing dropping in cost recently, it's never the wrong time to think about a new loan! Refinancing has various advantages that will often make it worth the initial cost many times over.
Advantages of Refinancing
When you refinance, you may be able to lower your interest rate and monthly mortgage payment amount, sometimes significantly. You also might have the option of tapping into your home equity by "cashing out" a sum of money to renovate your home, consolidate debt, or plan a special vacation. With reduced rates, you might also be able to build your home equity faster by moving to a shorter-term mortgage loan.
The Cost
Of course, you'll have some fees and expenses during the the refinance process. With your refinance, you are paying for many of the same things you were charged for during your existing mortgage. Included in the list can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You might think about paying points to reduce your interest rate. If you pay (on average) 3% of the loan amount at the start, the savings for the life of the new mortgage can be great. Please talk to a tax professional before acting on hear-say that the points paid may be deducted on your taxes.
Speaking of taxes, when your interest rate is lowered, it follows that you will also be reducing the interest amount that you'll be able to deduct on your federal income taxes. This is another cost that some borrowers take into account. We can help you do the math! Call us at 4357556622.
In the end, for most borrowers the total of initial costs to refinance will be made up soon in savings each month. We will help you determine which mortgage loan program is ideal for you, looking at your cash on hand, the likelihood of selling your residence in the next few years, and the effect refinancing may have on your taxes. Call us at 4357556622 to get started.
Want to know more about refinancing your home? Call us at 4357556622.