Weighing the Options of Refinancing
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Are you looking for a new mortgage? We can help! Call us at 7072522700. Want to get started? Apply Now.
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Ever heard the old rule of thumb that states you should only refinance if the new interest rate is at least 2 points below your current one? Maybe several years ago that was sage advice, but as refinance costs have been falling recently, it may be time to take a serious look. Refinancing your loan has some benefits that will often make it worth the initial expenditure many times over.
Advantages
You could be able to lower your interest rate (sometimes significantly) and make smaller mortgage payments with a refinanced mortgage. You could also have the ability to "cash out" some of the built-up equity in your home, which you are able use to take care of higher interest debts, add on to your home, or take a vacation. With reduced interest rates, you might also get the chance to build your home equity faster by switching to a shorter-term mortgage loan.
Expenses and Fees
All of these advantages do come with some expense, though. You'll have to pay the same sort of fees as you did with your present mortgage. Included in the list will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
Paying points can result in a better interest rate. The money you will save on the life of the loan could be significant if you have paid up front about 3% of the new loan total. You may hear that points can be deducted on your income taxes, but because tax regulations are difficult to keep up with, please speak with a tax professional before making any decisions based on this.
One more expense that borrowers might take into account is that a lower rate of interest will reduce the interest amount you'll deduct on your taxes. We can help you do the math! Call us at 7072522700.
All things considered, for most people the amount of initial costs to refinance will be made up very quickly in monthly savings. We'll work with you to determine which program is ideal for you, taking into account your cash on hand, how likely you are to sell your home in the next few years, and how refinancing can effect your taxes. Call us at 7072522700 to get you started.
Curious about refinancing your home? Call us at 7072522700.