Is Refinancing Worth the Cost?
 |
 |
 |
In the market for a mortgage loan? We can help! Give us a call at 8102292820. Want to get started? Apply Here.
|
|
|
|
|
Ever hear the old rule of thumb that states you should only consider refinancing if the new interest rate will be at least two points under your existing one? That may have been accurate a while back, but with the fact that refinancing has been costing less over the last few years, it's a good time to think about a new mortgage loan! A refinanced mortgage loan can be worth its cost several times over, factoring in the advantages that it brings, in addition to a reduced interest rate.
Advantages of Refinancing
When you refinance, you may be able to reduce your interest rate and mortgage payment amount, sometimes significantly. You could also have the ability to "cash out" some of the built-up equity in your home, which you may use to consolidate debts, improve your home, or plan a vacation. With reduced rates, you might also be able to build your home equity faster by changing to a shorter-term mortgage loan.
Fees and Expenses
All these advantages do come with some expense, though. You'll have to pay the same types of fees as with your present home loan. Included in your costs can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
Paying discount points can result in a lower interest rate. The amount you will save over the life of the loan might be substantial if you have paid up front about three percent of the new loan total. You might hear that the points may be tax deductible, but since tax regulations can be ever-changing, please consult with a tax professional before considering this in your calculations.
Another cost that borrowers may take into account is that a reduced interest rate will lower the interest amount you will deduct from your taxes. Call us at 8102292820 to help you do the math.
Most borrowers find that the monthly savings quickly balance out the initial expenses of refinancing. We'll help you figure out which mortgage program is best for you, taking into account your cash on hand, how likely you are to sell your residence in the near future, and how refinancing could effect your taxes. Call us at 8102292820 to get started.
Want to know more about refinancing your home? Give us a call: 8102292820.