Weighing the Options of Refinancing
 |
 |
 |
Shopping for a mortgage? We will be glad to help! Give us a call at 7072522700. Want to get started? Apply Now.
|
|
|
|
|
Ever heard the pearl of wisdom that states you should only refinance if your new interest rate will be at least 2 points lower than your existing one? Maybe that was sound advice a number of years ago, but since refinance costs have been getting lower, it may be a good time to look into it. A refinanced mortgage loan may be worth its cost many times over, because of the advantages that come, along with a lower interest rate.
Advantages
You could be able to bring down your interest rate (sometimes by a lot) and reduce your mortgage payment amount with your refinanced loan. You might also be able to "cash out" a portion of your home equity, which you may use to take care of higher interest debts, make home improvements, or plan a vacation. You may have the option to refinance to a shorter-term mortgage loan, giving you the ability to build your home equity quicker.
Expenses and Fees
Of course, you'll have to pay for your the refinance process. You will pay the same kinds of fees as with your existing mortgage. Among these may be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.
Do the Math
You might look into paying points to reduce your interest rate. The money you will save on the life of the mortgage might be substantial if you've paid up front about three percent of the new loan balance. You might be told that points can be tax deductible, but since tax regulations can be difficult to keep up with, we urge you to consult with a tax professional before depending on this.
Another thing about taxes is that once your interest rate is lowered, it follows that you'll also be reducing the interest amount that you'll be able to deduct from your taxes. This is another cost that borrowers consider. We can help you do the math! Call us at 7072522700.
Most people find that the monthly savings quickly balance out the initial cost of refinancing. We'll help you figure out what loan program is right for you, taking into account your cash on hand, how likely you are to sell your home in the next few years, and the effect refinancing could have on your taxes. Call us at 7072522700 to get started.
Curious about refinancing your home? Call us: 7072522700.