When is Refinancing Worth it?
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Shopping for a mortgage loan? We can help! Give us a call today at 6784672330. Ready to get started? Apply Now.
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Have you ever heard the pearl of wisdom that says you should only refinance if your new interest rate is at least two points lower than your existing one? That may have been true a while back, but with refinancing dropping in cost in recent years, it is a good time to consider a new mortgage loan! Refinancing has various benefits that often make it worth the initial cost a few times over.
Benefits
You could be able to lower your interest rate (sometimes by a lot) and reduce your mortgage payment amount with your refinanced mortgage. You also could be given the option of tapping into your home equity by "cashing out" a sum of money to remodel your home, consolidate debt, or plan a special vacation. You might have the option to refinance to a shorter-term mortgage program, giving you the ability to build up your equity faster.
The Cost
As you probably expect, you'll have to pay for your the refinance process. You will have the same types of expenses and fees as you did with your existing mortgage. 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 investigate paying points to receive a reduced interest rate. Your savings on the life of the loan might be substantial if you've paid up front about three percent of the new loan total. You may hear that the points may be deducted on your income taxes, but since tax regulations can be difficult to keep up with, please consult a tax professional before considering this in your calculations.
Another expense that borrowers may consider is that a reduced interest rate will lower the interest amount you will deduct from your federal income taxes. We can help you do the math! Call us at 6784672330.
In the end, for most the total of initial costs to refinance will be paid back very quickly in savings each month. We'll help you find out what mortgage program is the right fit for you, looking at your cash on hand, the likelihood of selling your house in the near future, and how refinancing could effect your taxes. Call us at 6784672330 to get started.
Want to know more about refinancing your home? Call us: 6784672330.