Is Refinancing Worth the Cost?
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Shopping for a mortgage loan? We will be glad to help! Call us at 3032282254. Ready to begin? Apply Here.
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It has been said that only when your new interest will be at least two points under your current rate, should you refinance your mortgage. That might have been valid years ago, but with refinancing dropping in cost in recent years, it is never the wrong time to consider a new mortgage! Refinancing has some advantages that often make it worth the initial expenditure a few times over.
Advantages
When you refinance, you may have the ability to reduce the interest rate and monthly payment , sometimes by a lot. You may also be able to "cash out" a portion of your equity, that you may use to take care of higher interest debt, improve your home, or take a vacation. With lower interest rates, you might also be able to build up home equity faster by moving to a shorter term mortgage loan.
Fees and Expenses
All of these benefits do cost something, though. You'll have the same types of fees as you did with your current home loan. Included in your costs can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
Paying points can get you a lower interest rate. Your savings over the life of the mortgage loan may be substantial if you've paid up front about three percent of the new loan total. We recommend that you consult with a tax professional before acting on rumors that the paid points can be deducted on your federal income taxes.
Another thing about taxes is that once you reduce your interest rate, it follows that you will also be reducing the paid interest amount that you'll be able to deduct on your federal income taxes. This is one more expense that borrowers consider. Call us at 3032282254 to help you do the math.
Most people find that the savings per month outweigh the up-front cost of a refinance. We can help you find out what your options are, considering the effect a refinance could have on your taxes, how likely you might be to sell in the near future, and your money on hand. Call us at 3032282254 to get started.
Curious about refinancing your home? Call us: 3032282254.