When is Refinancing Worth it?
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Are you looking for a new mortgage? We will be glad to assist you! Call us at 9162758775. Ready to begin? Apply Here.
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Some have said that only if your new interest is at least 2 points below your current rate, should you refinance your mortgage. Maybe that was sound advice several years ago, but as refinance costs have been getting lower, it could be time to take a serious look. A refinanced mortgage may be worth its cost several times over, because of the advantages that may come, along with a reduced interest rate.
Advantages of Refinancing
When you refinance, you could have the ability to lower the interest rate and monthly payment , sometimes considerably. You also might have the option of pulling out some of the equity in your property by "cashing out" some funds to renovate your home, consolidate debt, or plan a special vacation. With lower interest rates, you might also get the chance to build up home equity more quickly by switching to a shorter term mortgage.
Fees and Expenses
All these advantages do come with some expense, though. You'll have the same types of fees as with your present mortgage loan. Among these may be settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.
Doing the Math
Paying points can help you get a lower interest rate. The amount you will save on the life of the loan could be substantial if you've paid up front about 3% of the new loan total. We recommend that you talk to a tax professional before acting on rumors that these paid points may be deducted on your federal income taxes.
Another thing about taxes is that once you bring down your interest rate, of course you will also be lowering the paid interest amount that you'll be able to deduct from your federal income taxes. This is another cost that borrowers take into consideration. We can help you do the math! Call us at 9162758775.
Most borrowers find that the savings each month quickly outweigh the initial expenses of a refinance. We'll help you find out which program is right for you, taking into account your cash on hand, how likely you are to sell your home in the next few years, and what effect refinancing might have on your taxes. Call us at 9162758775 to get started.
Curious about refinancing? Call us: 9162758775.