Is Refinancing Worth the Cost?
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Are you looking for a mortgage loan? We'll be glad to answer your questions about our many mortgage solutions! Give us a call today at 7072522700. Want to get started? Apply Here.
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Ever hear the old rule of thumb that says you should only consider refinancing if the new interest rate is at least two points below your existing one? That may have been good advice years ago, but with refinancing dropping in cost recently, it's a good time to think about a new loan! Refinancing has a variety of advantages that will often make it worth the up-front cost many times over.
Advantages
You may be able to lower your interest rate (sometimes by a lot) and have smaller monthly payments with a refinanced loan. You also might have the option of tapping into the equity in your property by "cashing out" some funds to fix up your home, consolidate debt, or take your family on a vacation. You may have the option to refinance into a shorter-term mortgage program, giving you the ability to build your home equity quicker.
The Cost
Of course, you will have some fees and expenses during your the refinance process. With your refinance, you're paying for basically the same things you paid for at the time you got your current mortgage. Included in your costs will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Doing the Math
You might look into paying points to reduce your interest rate. Your savings on the life of the loan could be significant if you have paid up front about 3% of the new loan balance. You may be told that points can be tax deductible, but because tax regulations can be difficult to keep up with, please consult your tax professional before considering this in your calculations.
One more expense that a borrower might take into account is that a lower interest rate will lower 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 total of initial costs to refinance will be made up soon in savings each month. We'll work with you to determine which loan program is best for you, taking into account your cash on hand, the likelihood of selling your house in the next few years, and what effect refinancing will probably have on your taxes. Call us at 7072522700 to get started.
Curious about refinancing your home? Call us: 7072522700.