Is Refinancing Worth the Cost?
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Shopping for a mortgage loan? We'll be glad to answer your questions about your mortgage needs! Give us a call at 7072522700. Ready to get started? Apply Here.
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Ever heard the pearl of wisdom that says you should only consider refinancing if your new interest rate will be at least 2 points under your present one? Perhaps that was sound advice several years ago, but since refinance costs have been getting lower, it could be time to look into it. Refinancing has a number of advantages that often make it worth the up-front expenditure several times over.
Benefits from Refinancing
When you refinance, you may be able to lower your interest rate and mortgage payment , sometimes by a lot. Additionally, you might be given the option of pulling out some of your home equity by "cashing out" some funds to renovate your home, consolidate debt, or plan a special vacation. With lower interest rates, you may also be able to build your home equity faster by moving to a shorter term mortgage.
Expenses and Fees
All of these benefits do cost something, though. With your refinance, you're paying for many of the same things you paid for during your existing mortgage. Included in the list can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
Paying points can result in a lower interest rate. Your savings on the life of the mortgage may be substantial if you've paid up front about 3% of the new loan total. Please talk to a tax professional before acting on hear-say that these points paid can be deducted on your federal income taxes.
One more cost that a borrower may consider is that a reduced rate of interest will reduce the interest amount you'll be able to deduct from your federal income taxes. Call us at 7072522700 to help you do the math.
All things considered, for most the total of initial costs to refinance will be made up soon in monthly savings. We can help you explore what your options are, considering the effect a refinance may have on your taxes, if you are likely to sell your home in the near future, and your cash on hand. Call us at 7072522700 to get started.
Curious about refinancing your home? Call us at 7072522700.