Is Refinancing Worth the Cost?
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Shopping for a mortgage loan? We will be glad to assist you! Call us at 9162758775. Want to get started? Apply Here.
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Some have said that only when your new interest is at least 2 points under your current rate, should you refinance your mortgage. That may have been accurate a while back, but as refinancing has been costing less over the last few years, it's a good time to explore the options of a new mortgage! Refinancing your mortgage has a variety of advantages that will often make it worth the up-front expenditure many times over.
Advantages
When you refinance, you could have the ability to reduce your interest rate and mortgage payment , sometimes by a lot. You might also be able to "cash out" some of the built-up equity in your home, which you can use to take care of higher interest debts, add on to your home, or finance a vacation. You may have the option to refinance into a shorter-term mortgage program, enabling you to build up your home equity faster.
Fees and Expenses
All of these advantages do cost something, though. With your refinance, you're paying for basically the same things you paid for when you obtained your existing mortgage. Included in your costs will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You might look into paying points to reduce your interest rate. If you pay (on average) 3% of the loan amount at the start, the savings for the life of the refinanced loan can be great. You may be told that these points can be deducted on your income taxes, but as tax regulations can be difficult to keep up with, please speak with a tax professional before depending on this.
An additional cost that a borrower might consider is that a lower rate of interest will reduce the interest amount you will deduct on your federal income taxes. Call us at 9162758775 to help you do the math.
In the end, for most the total of up-front costs to refinance will be paid back soon in monthly savings. We will help you find out which mortgage loan program is the right fit for you, looking at your cash on hand, the likelihood of selling your home in the near future, and the effect refinancing might have on your taxes. Call us at 9162758775 to get you started.
Want to know more about refinancing? Give us a call: 9162758775.