When is Refinancing Worth it?
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Shopping for a mortgage loan? We'll be glad to discuss your mortgage needs! Call us at 8102292820. Ready to begin? Apply Now.
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Some have said that only if your new interest will be at least two points lower, should you refinance your loan. That may have been true a while back, but with the fact that refinancing has been costing less in recent years, it's never the wrong time to explore the options of a new loan! A refinance is often worth its cost several times over, factoring in the advantages that come, along with a reduced interest rate.
Benefits
You could be able to bring down your interest rate (sometimes substantially) and make smaller mortgage payments with your refinanced loan. You also could have the option of tapping into the equity in your home by "cashing out" a sum of money to fix up your home, consolidate debt, or plan a special vacation. You might have the option to refinance into a shorter-term mortgage loan, enabling you to add to your equity quicker.
Fees and Expenses
All these benefits do cost something, though. You'll have the same kinds of fees as with your existing mortgage loan. These can include settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.
Doing the Math
You might investigate paying points to receive a reduced interest rate. When you pay (on average) three percent of the mortgage loan amount initially, the savings for the life of the new loan can be substantial. We recommend that you consult with a tax professional before acting on hear-say that the points paid can be deducted on your taxes.
Another expense that borrowers may consider is that a lower rate of interest will lower the interest amount you'll deduct from your federal income taxes. Call us at 8102292820 to help you do the math.
Ultimately, for most borrowers the total of initial costs to refinance are paid back very quickly in savings each month. We'll work with you to determine what loan program is ideal for you, considering your cash on hand, how likely you are to sell your residence in the next few years, and what effect refinancing could have on your taxes. Call us at 8102292820 to get you started.
Curious about refinancing? Give us a call: 8102292820.