Is Refinancing Worth the Cost?
 |
 |
 |
Are you looking for a new mortgage loan? We'll be glad to talk about our mortgage offerings! Call us at 5122916100. Ready to begin? Apply Now.
|
|
|
|
|
Ever heard the pearl of wisdom that says you should only refinance if the new interest rate is at least two points below your existing rate? Perhaps several years ago that was good advice, but since refinance costs have been falling recently, it may be time to look into it. Refinancing has a number of benefits that can make it worth the up-front expenditure many times over.
Advantages
You could be able to lower your interest rate (sometimes by a lot) and make smaller mortgage payments with your refinanced mortgage. Additionally, you might have the option of pulling out some of the equity in your property by "cashing out" some money to renovate your home, consolidate debt, or take your family on a vacation. You might be able to refinance into a shorter-term mortgage program, giving you the ability to add to your home equity faster.
The Cost
Of course, you will have some fees and expenses during the process of refinancing. You'll have the same kinds of expenses and fees as you did with your present mortgage. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
You might think about paying points to reduce your interest rate. The money you'll save over the life of the mortgage might be significant if you have paid up front about 3% of the new loan total. You may have heard that points can be tax deductible, but since tax regulations are difficult to keep up with, please speak with a tax professional before making any decisions based on this.
An additional cost that a borrower may take into account is that a reduced rate of interest will reduce the interest amount you'll deduct on your federal income taxes. Call us at 5122916100 to help you do the math.
Most borrowers find that the monthly savings outweigh the initial cost of a refinance. We'll work with you to figure out which mortgage loan program is best for you, looking at your cash on hand, the likelihood of selling your residence in the near future, and the effect refinancing may have on your taxes. Call us at 5122916100 to get you started.
Want to know more about refinancing? Call us: 5122916100.