Is Refinancing Worth the Cost?
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Are you looking for a mortgage? We will be glad to help! Call us at 7072522700. Ready to get started? Apply Now.
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Some have said that only if your new interest will be at least 2 points lower, should you refinance your mortgage. That could have been valid years ago, but since refinancing has been costing less recently, it's never the wrong time to think about a new mortgage! A refinanced mortgage is often worth its cost several times over, because of the advantages that it brings, along with a reduced interest rate.
Benefits
When you refinance, you might have the ability to lower the interest rate and mortgage payment amount, perhaps considerably. You might also be able to "cash out" a portion of your equity, that you can use to consolidate debts, add on to your home, or take a vacation. With lower interest rates, you might also get the chance to build up home equity more quickly by moving to a shorter term loan.
The Cost
Of course, you'll have to pay for your process of refinancing. You will have to pay the same kinds of fees as with your existing home loan. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
Paying discount points can help you get a lower interest rate. When you pay (on average) 3% of the loan amount at the start, your savings for the term of the refinanced mortgage loan can be significant. You may hear that points may be deducted on your income taxes, but as tax regulations can be difficult to keep up with, please consult with a tax professional before considering this in your calculations.
An additional expense that a borrower might take into account is that a reduced rate of interest will lower the interest amount you will deduct on your federal income taxes. Call us at 7072522700 to help you do the math.
Most borrowers find that the savings each month quickly balance out the initial expenses of refinancing. We'll work with you to find out what mortgage program is right for you, looking at your cash on hand, the likelihood of selling your residence in the near future, and how refinancing could effect your taxes. Call us at 7072522700 to get started.
Curious about refinancing your home? Call us: 7072522700.