Is Refinancing Worth the Cost?
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Are you looking for a new mortgage loan? We can assist you! Call us at (281) 778-0805. Ready to get started? Apply Online Now.
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It has been said that only in the case your new interest is at least 2 points lower, should you refinance your mortgage. That could have been sound advice years ago, but since refinancing has been costing less in recent years, it is never the wrong time to explore the options of a new mortgage loan! A refinance is often worth its cost many times over, because of the advantages that it brings, along with a reduced interest rate.
Benefits
When you refinance, you might have the ability to lower the interest rate and mortgage payment amount, perhaps by a lot. Additionally, you might have the option of pulling out some of your home equity by "cashing out" some money to remodel your home, consolidate debt, or plan a special vacation. You might have the option to refinance into a shorter-term mortgage loan, giving you the ability to build up your home equity quicker.
Expenses and Fees
All these benefits do come with some expense, though. You will pay the same sort of expenses and fees as you did with your current mortgage. Among these may be settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.
Do the Math
You might consider paying points to receive a lower interest rate. Your savings over the life of the mortgage might be significant if you've paid up front about 3% of the new loan balance. Please consult with a tax professional before acting on hear-say that the paid points can be deducted on your taxes.
Another thing about taxes is that if you bring down 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 one more cost that some borrowers consider. We can help you do the math! Call us at (281) 778-0805.
Most people find that the savings each month quickly outweigh the initial expenses of refinancing. We will help you figure out which loan program is right for you, taking into account your cash on hand, how likely you are to sell your house in the next few years, and what effect refinancing could have on your taxes. Call us at (281) 778-0805 to get you started.
Curious about refinancing? Give us a call: (281) 778-0805.