When is Refinancing Worth it?
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Shopping for a mortgage? We will be glad to assist you! Give us a call today at 7274926100. Want to get started? Apply Online Now.
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Some have said that only in the case your new interest is at least two points lower, should you refinance your loan. That might have been accurate years ago, but as refinancing has been costing less over the last few years, it's never the wrong time to explore the options of a new mortgage loan! Refinancing your mortgage loan has a variety of advantages that will often make it worth the up-front expenditure many times over.
Advantages
When you refinance, you may have the ability to reduce the interest rate and mortgage payment amount, sometimes considerably. Additionally, you may have the option of tapping into the equity in your property by "cashing out" some funds to remodel your home, consolidate debt, or plan a special vacation. With lower rates, you might also get the chance to build up home equity more quickly by moving to a shorter term loan.
Fees and Expenses
As you probably expect, you will have to pay for your the refinance process. With your refinance, you are paying for many of the same things you paid for at the time you got your current mortgage. These could include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and so on.
Do the Math
You could need to pay points (prepaid interest) to attain a more favorable interest rate. The money you will save on the life of the mortgage might be substantial if you've paid up front about 3% of the new loan total. You might be told that points can be deducted on your income taxes, but as tax regulations can be ever-changing, we urge you to speak with a tax professional before depending on this.
Another thing about taxes is that when you reduce your interest rate, it follows that you will also be reducing the paid interest amount that you will be able to deduct from your federal income taxes. This is another expense that borrowers take into account. Call us at 7274926100 to help you do the math.
Most borrowers find that the savings each month quickly outweigh the initial cost of a refinance. We'll help you determine which program is the best fit for you, taking into account your cash on hand, the likelihood of selling your home in the near future, and how refinancing may effect your taxes. Call us at 7274926100 to get you started.
Curious about refinancing your home? Call us at 7274926100.
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