Weighing the Options of Refinancing
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Some have said that only in the case your new interest is at least two points below your current rate, should you refinance your loan. That could have been true a while back, but with refinancing dropping in cost recently, it's never the wrong time to think about a new mortgage loan! Refinancing your mortgage has some advantages that often make it worth the up-front cost a few times over.
Benefits from Refinancing
You might be able to bring down your interest rate (sometimes by a lot) and reduce your monthly payment amount with your refinanced mortgage loan. You also might be given the option of tapping into your home equity by "cashing out" some funds to renovate your home, consolidate debt, or take your family on a vacation. You might have the option to refinance into a shorter-term mortgage, enabling you to add to your equity quicker.
The Cost
All these advantages do cost something, though. You will have to pay the same kinds of expenses and fees as you did with your existing home loan. Among these may be settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.
Doing the Math
Paying points can result in a lower interest rate. The money you'll save over the life of the mortgage could be substantial if you have paid up front about three percent of the new loan balance. We recommend that you consult a tax professional before acting on hear-say that these points paid may be deducted on your taxes.
An additional expense that borrowers may consider is that a lower interest rate will lower the interest amount you'll be able to deduct on your taxes. We can help you do the math! Call us at 2148657442.
Most borrowers find that the monthly savings quickly outweigh the initial cost of refinancing. We can help you figure out your options, considering the effect a refinance could have on your taxes, whether you are likely to sell your home in the next couple of years, and your available cash. Call us at 2148657442 to get started.
Want to know more about refinancing your home? Give us a call at 2148657442.