Is Refinancing Worth the Cost?
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Looking for mortgage advice? We will be glad to assist you! Give us a call today at 9162758775. Ready to begin? Apply Here.
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It has been said that only in the case your new interest will be at least two points under your current rate, should you refinance your loan. That could have been accurate a while back, but with refinancing dropping in cost recently, it is never the wrong time to explore the options of a new mortgage loan! A refinanced mortgage loan may be worth its cost several times over, considering the benefits that it brings, as well as a lower interest rate.
Benefits
You could be able to bring down your interest rate (sometimes by a lot) and make smaller monthly payments with a refinanced mortgage. You could also have the ability to "cash out" a portion of the built-up equity in your residence, that you can use to take care of higher interest debts, improve your home, or take a vacation. With lower interest rates, you might also be able to build up home equity more quickly by moving to a shorter term mortgage.
Fees and Expenses
All of these advantages do come with some expense, though. With your refinance, you're paying for basically the same things you were charged for when you got your original mortgage. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Doing the Math
You might investigate paying points to get a lower interest rate. When you pay (on average) three percent of the mortgage loan amount initially, your savings for the term of the refinanced mortgage can be significant. You may be told that the points can be tax deductible, but because tax regulations are difficult to keep up with, we urge you to consult a tax professional before making any decisions based on this.
Speaking of taxes, when you lower your interest rate, naturally you will also be reducing the interest amount that you may deduct on your taxes. This is one more expense that borrowers consider. We can help you do the math! Call us at 9162758775.
Most people find that the savings each month balance out the up-front cost of refinancing. We can help you explore what your options are, considering the effect a refinance may 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 9162758775 to get started.
Curious about refinancing? Give us a call: 9162758775.