Is Refinancing Worth the Cost?
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Are you looking for a new mortgage? We can help! Call us at 6784672330. Ready to begin? Apply Online Now.
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Ever heard the old rule of thumb that states you should only refinance if your new interest rate is at least 2 points below your present one? That may have been accurate years ago, but with refinancing dropping in cost recently, it's a good time to consider a new loan! A refinance is often worth its cost several times over, considering the benefits that it brings, as well as a lower interest rate.
Advantages
When you refinance, you could be able to lower your interest rate and monthly mortgage payment , sometimes considerably. Additionally, you may be given the option of pulling out some of the equity in your home by "cashing out" a sum of money to fix up your home, consolidate debt, or plan a special vacation. With reduced rates, you might also be able to build your home equity faster by switching to a shorter term loan.
The Cost
As you probably expect, you'll have to pay for your process of refinancing. With your refinance, you're paying for basically the same things you were charged for during your current mortgage loan. These can include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.
Do the Math
You might offer to pay discount points (prepaid interest) to get a better interest rate. The money you'll save on the life of the loan may be substantial if you have paid up front about 3% of the new loan balance. You may be told that points may be tax deductible, but as tax regulations are ever-changing, we urge you to consult with a tax professional before considering this in your calculations.
An additional cost that a borrower might take into account is that a reduced rate of interest will reduce the interest amount you will deduct on your taxes. Call us at 6784672330 to help you do the math.
Most people find that the savings each month quickly balance out the up-front cost of refinancing. We will work with you to determine which mortgage loan program is best for you, considering your cash on hand, how likely you are to sell your house in the near future, and how refinancing could effect your taxes. Call us at 6784672330 to get you started.
Curious about refinancing your home? Call us at 6784672330.