Is Refinancing Worth the Cost?
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Looking for a loan? We will be glad to assist you! Call us at 2147390569. Ready to begin? Apply Online Now.
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Ever heard the old rule of thumb that says you should only consider refinancing if your new interest rate will be at least two points under your existing rate? That could have been valid a while back, but with refinancing dropping in cost over the last few years, it is never the wrong time to explore the options of a new loan! A refinance is often worth its cost several times over, because of the benefits that come, as well as a lower interest rate.
Advantages
You could be able to lower your interest rate (sometimes significantly) and reduce your monthly payment amount with a refinanced loan. You could also have the option to "cash out" a portion of your equity, that you are able use to consolidate debt, add on to your home, or take a vacation. With lower rates, you might also be able to build up home equity faster by switching to a shorter term loan.
Fees and Expenses
All these advantages do come with some expense, though. You'll have to pay the same types of expenses and fees as with your present mortgage. These may include settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and so on.
Doing the Math
You might consider paying points to be given a lower interest rate. When you pay (on average) 3% of the loan amount initially, your savings for the term of the refinanced mortgage can be significant. Please consult with a tax professional before acting on hear-say that the points paid may be deducted on your federal income taxes.
Speaking of taxes, once you lower your interest rate, it follows that you will also be lowering the interest amount that you'll be able to deduct on your federal income taxes. This is one more expense that some borrowers take into account. Call us at 2147390569 to help you do the math.
Most people find that the monthly savings outweigh the up-front cost of a refinance. We'll help you figure out which loan program is ideal for you, taking into account your cash on hand, the likelihood of selling your house in the near future, and how refinancing may effect your taxes. Call us at 2147390569 to get started.
Want to know more about refinancing your home? Call us at 2147390569.