Weighing the Options of Refinancing
 |
 |
 |
Searching for a loan? We'd be thrilled to answer your questions about our many mortgage solutions! Call us at 7072522700. Ready to begin? Apply Online Now.
|
|
|
|
|
Some have said that only in the case your new interest will be at least 2 points lower, should you refinance your loan. Maybe several years ago that was good advice, but as refinance costs have been getting lower, it could be time to look into it. Refinancing your mortgage loan has some benefits that will often make it worth the up-front cost many times over.
Benefits from Refinancing
You could be able to bring down your interest rate (sometimes by a lot) and have smaller mortgage payments with a refinanced loan. Additionally, you could be given the option of pulling out some of the equity in your home by "cashing out" some money to renovate your home, consolidate debt, or plan a special vacation. You might have the option to refinance into a shorter-term mortgage program, giving you the ability to add to your equity quicker.
Fees and Expenses
Of course, you'll have to pay for the the refinance process. When you refinance, you are paying for most of the same things you were charged for at the time you obtained your current mortgage. These probably include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Do the Math
You could need to pay points (prepaid interest) to get a lower rate of interest. If you pay (on average) three percent of the mortgage loan amount initially, the savings for the life of the refinanced loan can be significant. We recommend that you consult a tax professional before acting on advice that any points paid may be deducted on your taxes.
Speaking of taxes, if you lower your interest rate, it follows that you will also be reducing the interest amount that you can deduct from your taxes. This is another expense that borrowers take into consideration. Call us at 7072522700 to help you do the math.
Ultimately, for most borrowers the amount of initial costs to refinance are paid back soon in savings each month. We can help you explore what your options are, considering the effect a refinance could have on your taxes, if you are likely to sell your home in the next couple of years, and your available cash. Call us at 7072522700 to get you started.
Curious about refinancing your home? Call us at 7072522700.