Is Refinancing Worth the Cost?
 |
 |
 |
Searching for mortgage advice? We'd be thrilled to answer your questions about our many mortgage solutions! Give us a call today at 2817780805. Ready to begin? Apply Here.
|
|
|
|
|
Ever hear the pearl of wisdom that says you should only consider refinancing if your new interest rate is at least two points below your present one? Maybe several years ago that was wise advice, but since refinance costs have been falling recently, it may be time to take a serious look. A refinance can be worth its cost many times over, factoring in the benefits that may come, along with a reduced interest rate.
Benefits from Refinancing
You might be able to bring down your interest rate (sometimes significantly) and reduce your monthly mortgage payment amount with your refinanced mortgage loan. Additionally, you might be given the option of tapping into the equity in your property by "cashing out" some money to fix up your home, consolidate debt, or take your family on a vacation. You could be able to refinance to a shorter-term mortgage loan, enabling you to add to your home equity faster.
Expenses and Fees
All these advantages do come with some expense, though. You'll be charged the same sort of expenses and fees as you did with your existing mortgage loan. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
You might offer to pay discount points (prepaid interest) to attain a better interest rate. Your savings on the life of the mortgage might 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 can be deducted on your federal income taxes.
An additional expense that a borrower might take into account is that a reduced interest rate will reduce the interest amount you will deduct on your federal income taxes. We can help you do the math! Call us at 2817780805.
All things considered, for most people the total of initial costs to refinance will be paid back soon in savings each month. We can help you figure out your options, considering the effect a refinance may have on your taxes, if you are likely to sell your home in the near future, and your cash on hand. Call us at 2817780805 to get you started.
Want to know more about refinancing your home? Call us: 2817780805.