When is Refinancing Worth it?
 |
 |
 |
Looking for mortgage advice? We'll be glad to talk about our mortgage offerings! Give us a call at 7209331025. Ready to get started? Apply Here.
|
|
|
|
|
It has been said that only if your new interest is at least two points lower, should you refinance your mortgage. That may have been true years ago, but with refinancing dropping in cost in recent years, it's never the wrong time to explore the options of a new mortgage! Refinancing your mortgage loan has a variety of advantages that often make it worth the up-front cost many times over.
Benefits
You could be able to bring down your interest rate (sometimes substantially) and reduce your mortgage payment amount with a refinanced mortgage. You may also have the option to "cash out" a portion of your equity, which you will be able use to take care of higher interest debts, improve your home, or plan a vacation. You may be able to refinance to a shorter-term mortgage program, enabling you to build your equity faster.
The Cost
Of course, you'll have to pay for your process of refinancing. You will pay the same types of fees as you did with your current home loan. These can include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.
Do the Math
Paying discount points can help you get a lower interest rate. Your savings on the life of the mortgage could be significant if you've paid up front about 3% of the new loan balance. You may be told that these points can be deducted on your income taxes, but because tax regulations can be ever-changing, we urge you to consult with a tax professional before considering this in your calculations.
An additional cost that a borrower may consider is that a lower interest rate will reduce the interest amount you'll be able to deduct from your federal income taxes. We can help you do the math! Call us at 7209331025.
Ultimately, for most 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 available cash. Call us at 7209331025 to get you started.
Curious about refinancing? Give us a call at 7209331025.