Is Refinancing Worth the Cost?
 |
 |
 |
Searching for a mortgage loan? We'd be thrilled to answer your questions about your mortgage needs! Give us a call at 7072522700. Want to get started? Apply Online Now.
|
|
|
|
|
Ever heard the old rule of thumb that says you should only consider refinancing if your new interest rate is at least two points under your present rate? Perhaps that was sound advice several years ago, but since refinance costs have been falling recently, it could be a good time to look into it. Refinancing has various benefits that often make it worth the up-front cost a few times over.
Advantages
When you refinance, you could be able to reduce your interest rate and mortgage payment , sometimes significantly. You might also be able to "cash out" a portion of your equity, that you can use to take care of higher interest debts, add on to your home, or finance a vacation. With reduced rates, you might also get the chance to build up home equity faster by changing to a shorter-term mortgage.
The Cost
All these benefits do come with some expense, though. You'll be charged the same kinds of expenses and fees as you did with your existing home loan. These may include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.
Do the Math
Paying discount points can help you attain a lower interest rate. The amount you will save over the life of the mortgage loan might be significant if you have paid up front about three percent of the new loan balance. We recommend that you consult a tax professional before acting on advice that any paid points may be deducted on your taxes.
One more cost that borrowers might consider is that a lower interest rate will reduce the interest amount you'll deduct from your taxes. We can help you do the math! Call us at 7072522700.
Ultimately, for most borrowers the total of up-front costs to refinance will be paid back very quickly in monthly savings. We can help you figure out what your options are, considering the effect a refinance may have on your taxes, whether you are likely to sell your home in the next couple of years, and your available cash. Call us at 7072522700 to get started.
Want to know more about refinancing your home? Call us: 7072522700.