When is Refinancing Worth it?

In the market for a new mortgage? We will be glad to assist you! Give us a call at 4357556622. Ready to get started? Apply Online Now.

Some have said that only in the case your new interest is at least two points below your current rate, should you refinance your loan. That could have been accurate years ago, but with refinancing dropping in cost in recent years, it's never the wrong time to explore the options of a new loan! A refinanced mortgage is often worth its cost many times over, because of the benefits that can come, along with a reduced interest rate.

Advantages

You could be able to lower your interest rate (sometimes significantly) and reduce your monthly mortgage payment amount with your refinanced loan. You may also have the ability to "cash out" a portion of your equity, that you can use to take care of higher interest debts, add on to your home, or take a vacation. You could be able to refinance to a shorter-term mortgage loan, giving you the ability to build your equity quicker.

The Cost

All of these advantages do come with some expense, though. You'll have to pay the same kinds of fees as with 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 discount points can help you get a lower interest rate. Your savings on the life of the loan could be substantial if you have paid up front about 3% of the new loan total. You might be told that these points can be deducted on your income taxes, but since tax regulations are ever-changing, please consult a tax professional before considering this in your calculations.

An additional cost that borrowers might take into account is that a lower rate of interest will lower the interest amount you'll be able to deduct on your federal income taxes. Call us at 4357556622 to help you do the math.

Most people find that the monthly savings quickly outweigh the initial expenses of a refinance. We can help you explore your options, considering the effect a refinance could have on your taxes, how likely you may be to sell in the near future, and your available cash. Call us at 4357556622 to get you started.

Curious about refinancing your home? Call us: 4357556622.