Weighing the Options of Refinancing
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Looking for mortgage advice? We can assist you! Call us at 7072522700. Want to get started? Apply Here.
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Have you ever heard the pearl of wisdom that states you should only refinance if the new interest rate will be at least two points under your current one? Perhaps that was good advice a number of years ago, but as refinance costs have been getting lower, it could be time to take a serious look. Refinancing your mortgage loan has a number of benefits that will often make it worth the initial expenditure several times over.
Benefits
When you refinance, you could have the ability to reduce the interest rate and monthly payment , perhaps significantly. You might also have the ability to "cash out" a portion of the built-up equity in your residence, which you can use to take care of higher interest debts, improve your home, or take a vacation. With lower interest rates, you might also be able to build up home equity more quickly by switching to a shorter term loan.
Expenses and Fees
All these advantages do come with some expense, though. With your refinance, you are paying for basically the same things you were charged for during your existing mortgage. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You might investigate paying points to get a reduced interest rate. If you pay (on average) 3% of the loan amount at the start, the savings for the term of the new mortgage loan can be significant. We recommend that you consult a tax professional before acting on rumors that any points paid can be deducted on your federal income taxes.
Speaking of taxes, once your interest rate is reduced, of course you'll also be lowering the interest amount that you'll be able to deduct from your federal income taxes. This is one more cost that some borrowers take into account. We can help you do the math! Call us at 7072522700.
Ultimately, for most the total of initial costs to refinance are made up soon in monthly savings. We'll work with you to determine what program is right for you, considering your cash on hand, the likelihood of selling your residence in the next few years, and how refinancing will effect your taxes. Call us at 7072522700 to get you started.
Want to know more about refinancing your home? Call us: 7072522700.