Is Refinancing Worth the Cost?
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Shopping for a mortgage loan? We'd be thrilled to discuss our mortgage offerings! Give us a call today at 2147390569. Want to get started? Apply Here.
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It has been said that only in the case your new interest will be at least two points lower, should you refinance your loan. Perhaps several years ago that was good advice, but since refinance costs have been getting lower, it could be time to look into it. A refinance is often worth its cost several times over, factoring in the advantages that come, in addition to a lower interest rate.
Benefits
You might be able to lower your interest rate (sometimes significantly) and reduce your monthly payment amount with your refinanced loan. You also may have the option of pulling out some of your home equity by "cashing out" a sum of money to fix up your home, consolidate debt, or plan a special vacation. With lower rates, you might also get the chance to build up home equity faster by moving to a shorter term loan.
Fees and Expenses
All of these advantages do cost something, though. You'll have to pay the same types of fees as you did with your current home loan. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
You might look into paying points to reduce your interest rate. If you pay (on average) 3% of the loan amount up front, the savings for the term of the new mortgage loan can be significant. You might have heard that points can be deducted on your income taxes, but as tax regulations are difficult to keep up with, please consult a tax professional before depending on this.
Another thing about taxes is that if you reduce your interest rate, of course you will also be lowering the interest amount that you'll be able to deduct on your federal income taxes. This is another expense that some borrowers consider. Call us at 2147390569 to help you do the math.
Most people find that the monthly savings quickly outweigh the initial expenses of a refinance. We can help you figure out what your options are, considering the effect a refinance could have on your taxes, if you are likely to sell your home in the near future, and your money on hand. Call us at 2147390569 to get started.
Want to know more about refinancing your home? Give us a call: 2147390569.