When is Refinancing Worth it?
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Ever heard the pearl of wisdom that says you should only consider refinancing if the new interest rate is at least 2 points lower than your present rate? That might have been sound advice years ago, but with refinancing dropping in cost recently, it's never the wrong time to consider a new mortgage loan! A refinanced mortgage loan may be worth its cost several times over, because of the advantages that it brings, along with a lower interest rate.
When you refinance, you might be able to lower the interest rate and mortgage payment , perhaps by a lot. You also may be given the option of tapping into your home equity by "cashing out" some funds to renovate your home, consolidate debt, or plan a special vacation. With lower interest rates, you might also get the chance to build up home equity more quickly by switching to a shorter term loan.
Fees and Expenses
Of course, you'll have some fees and expenses during your the refinance process. With your refinance, you're paying for basically the same things you paid for during your original mortgage loan. Included in your costs can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Doing the Math
You might investigate paying points to receive a reduced interest rate. The amount you'll save on the life of the mortgage might be significant if you have paid up front about three percent of the new loan balance. Please consult a tax professional before acting on hear-say that any points paid may be deducted on your taxes.
One more cost that borrowers might take into account is that a reduced rate of interest will lower the interest amount you will be able to deduct on your taxes. We can help you do the math! Call us at 7072522700.
All things considered, for most the amount of initial costs to refinance will be made up very quickly in savings each month. We can help you find out what your options are, considering the effect a refinance could have on your taxes, whether you are likely to sell your home in the near future, and your available cash. Call us at 7072522700 to get started.
Want to know more about refinancing? Give us a call at 7072522700.