Weighing the Options of Refinancing

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Ever heard the old rule of thumb that states you should only refinance if your new interest rate will be at least two points below your present one? Maybe that was sound advice a number of years ago, but as refinance costs have been getting lower, it could be time to take a serious look. Refinancing your mortgage loan has a variety of advantages that often make it worth the initial expenditure a few times over.

Advantages of Refinancing

When you refinance, you might be able to lower your interest rate and monthly mortgage payment amount, perhaps considerably. You also may have the option of tapping into your home equity by "cashing out" a sum of money to fix up your home, consolidate debt, or plan a special vacation. With lower interest rates, you might also get the chance to build up home equity more quickly by switching to a shorter-term loan.

Expenses and Fees

All of these benefits do come with some expense, though. You will pay the same types of fees as you did with your existing home loan. Among these can be settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.

Do the Math

Paying points can help you attain 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 3% of the new loan balance. You might have heard that these points can be deducted on your income taxes, but as tax regulations are difficult to keep up with, please consult your tax professional before considering this in your calculations.

Another expense that a borrower might take into account is that a lower rate of interest will lower the interest amount you will deduct on your taxes. We can help you do the math! Call us at 6784672330.

Ultimately, for most people the amount of initial costs to refinance will be made up soon in savings each month. We can help you explore your options, considering the effect a refinance could have on your taxes, if you are likely to sell your home in the next couple of years, and your cash on hand. Call us at 6784672330 to get you started.

Want to know more about refinancing your home? Give us a call at 6784672330.

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New Threshold Mortgage, Inc.

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2500 Caladium Dr NE
Atlanta, GA 30345-2010