Weighing the Options of Refinancing
 |
 |
 |
Shopping for a mortgage loan? We'll be glad to discuss your mortgage needs! Give us a call today at 7209331025. Ready to get started? Apply Online Now.
|
|
|
|
|
Have you ever heard the pearl of wisdom that says you should only consider refinancing if your new interest rate will be at least 2 points below your present rate? Maybe several years ago that was sage advice, but since refinance costs have been getting lower, it may be time to look into it. Refinancing your mortgage has a variety of benefits that will often make it worth the initial cost a few times over.
Advantages
When you refinance, you might have the ability to lower your interest rate and monthly payment , sometimes by a lot. You also might have the option of tapping into the equity in your house by "cashing out" some funds to renovate your home, consolidate debt, or take your family on a vacation. You could have the option to refinance into a shorter-term mortgage loan, giving you the ability to build up your equity faster.
Fees and Expenses
As you probably expect, you will have some fees and expenses during your the refinance process. When you refinance, you're paying for basically the same things you paid for at the time you got your existing mortgage. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You could need to pay discount points (prepaid interest) to gain a lower rate of interest. Your savings on the life of the loan could be significant if you have paid up front about 3% of the new loan total. You might hear that these points may be tax deductible, but since tax regulations are ever-changing, please consult a tax professional before considering this in your calculations.
Speaking of taxes, when your interest rate is lowered, of course you will also be reducing the paid interest amount that you'll be able to deduct on your federal income taxes. This is another expense that some borrowers consider. Call us at 7209331025 to help you do the math.
All things considered, for most borrowers the total of initial costs to refinance will be paid back soon in savings each month. We can help you explore your options, considering the effect a refinance might have on your taxes, if you are likely to sell your home in the next couple of years, and your available cash. Call us at 7209331025 to get started.
Want to know more about refinancing? Call us at 7209331025.