When is Refinancing Worth it?
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Shopping for a mortgage loan? We can assist you! Call us at 6784672330. Ready to begin? Apply Now.
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It has been said that only in the case your new interest will be at least 2 points lower, should you refinance your loan. Maybe several years ago that was sage advice, but since refinance costs have been getting lower, it may be a good time to look into it. Refinancing your mortgage loan has various advantages that will often make it worth the initial expenditure several times over.
Advantages
You might be able to bring down your interest rate (sometimes by a lot) and reduce your mortgage payment amount with a refinanced mortgage. You might also have the option to "cash out" some of the built-up equity in your home, which you may use to take care of higher interest debts, add on to your home, or take a vacation. You might have the option to refinance to a shorter-term mortgage, enabling you to build up your home equity faster.
The Cost
All of these advantages do cost something, though. You will have to pay the same kinds of expenses and fees as with your current mortgage loan. These can include settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.
Do the Math
You might need to pay points (prepaid interest) to get a better rate of interest. When you pay (on average) three percent of the mortgage loan amount initially, the savings for the term of the refinanced mortgage can be significant. We recommend that you consult a tax professional before acting on hear-say that the paid points can be deducted on your federal income taxes.
One more expense that a borrower might take into account is that a reduced interest rate will reduce the interest amount you'll deduct from your federal income taxes. We can help you do the math! Call us at 6784672330.
Most borrowers find that the savings per month quickly balance out the up-front cost of a refinance. We can help you explore what your options are, considering the effect a refinance may have on your taxes, whether you are likely to sell your home in the near future, and your cash on hand. Call us at 6784672330 to get you started.
Curious about refinancing your home? Give us a call at 6784672330.