Weighing the Options of Refinancing

Want to know more about refinancing? Call us at 678-467-2330.

Ever heard the old rule of thumb that says you should only consider refinancing if the new interest rate will be at least two points below your present one? That may have been valid years ago, but with refinancing dropping in cost over the last few years, it's a good time to think about a new mortgage loan! A refinance can be worth its cost many times over, factoring in the advantages that may come, as well as a reduced interest rate.

Advantages

You may be able to bring down your interest rate (sometimes substantially) and reduce your mortgage payment amount with a new mortgage. You may also have the option to "cash out" some of your equity, which you can use to take care of higher interest debts, make home improvements, or take a vacation. You might be able to refinance to a shorter-term mortgage, giving you the ability to build up your equity faster.

Expenses and Fees

All these benefits do cost something, though. When you refinance, you are paying for many of the same things you paid for during your current mortgage loan. Included in the list will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Doing the Math

You might look into paying discount points to receive a lower interest rate. The money you'll save over the life of the mortgage might be substantial  and any paid points can be deducted on your taxes.  Please talk to a tax professional before acting.

Speaking of taxes, if your interest rate is reduced you will also be lowering the paid interest amount that you can deduct from your federal income taxes.. Call us at 678-467-2330 to help you do the math.

In the end, for most borrowers the total of up-front costs to refinance are quickly recouped in monthly savings. ll work with you to find out which mortgage program is perfect for you, looking at your cash on hand, the likelihood of selling your home in the next few years, and how refinancing will impact your taxes.

Searching for a mortgage loan? We'd be thrilled to talk about our mortgage offerings! Give us a call at 678-467-2330. Want to get started? Apply Now.

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