When is Refinancing Worth it?
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Searching for a mortgage loan? We will be glad to assist you! Call us at 7072522700. Ready to begin? Apply Online Now.
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It has been said that only when your new interest will be at least 2 points lower, should you refinance your loan. Maybe that was sound advice several years ago, but since refinance costs have been falling recently, it may be a good time to look into it. A refinance may be worth its cost many times over, because of the advantages that come, as well as a reduced interest rate.
Benefits from Refinancing
You might be able to bring down your interest rate (sometimes substantially) and reduce your monthly mortgage payment amount with your refinanced mortgage loan. You might also have the ability to "cash out" some of your equity, which you can use to take care of higher interest debt, add on to your home, or finance a vacation. With lower interest rates, you may also get the chance to build up home equity faster by switching to a shorter term loan.
Fees and Expenses
All these advantages do come with some expense, though. With your refinance, you're paying for a lot of the same things you were charged for when you obtained your original mortgage loan. Among these can be settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.
Do the Math
Paying points can get you a lower interest rate. The money you'll save on the life of the mortgage loan might be significant if you've paid up front about three percent of the new loan total. Please consult with a tax professional before acting on rumors that these paid points may be deducted on your federal income taxes.
Another thing about taxes is that once your interest rate is lowered, of course you will also be lowering the interest amount that you can deduct from your federal income taxes. This is another cost that some borrowers take into account. We can help you do the math! Call us at 7072522700.
Most people find that the savings each month balance out the initial expenses of refinancing. We'll work with you to find out which loan program is ideal for you, taking into account your cash on hand, the likelihood of selling your residence in the next few years, and how refinancing might effect your taxes. Call us at 7072522700 to get you started.
Curious about refinancing your home? Give us a call at 7072522700.