Is Refinancing Worth the Cost?
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Shopping for a mortgage loan? We will be glad to help! Call us at 2817780805. Ready to begin? Apply Online Now.
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Some have said that only in the case your new interest is at least 2 points under your current rate, should you refinance your loan. Maybe that was sound advice several years ago, but as refinance costs have been falling recently, it could be a good time to take a serious look. A refinance can be worth its cost many times over, considering the benefits that it brings, as well as a reduced interest rate.
Benefits
When you refinance, you could be able to lower the interest rate and monthly mortgage payment , sometimes significantly. Additionally, you might have the option of pulling out some of the equity in your property by "cashing out" some money to fix up your home, consolidate debt, or plan a special vacation. You might have the option to refinance into a shorter-term mortgage, enabling you to build your equity quicker.
Expenses and Fees
Of course, you'll have to pay for the the refinance process. You will have to pay the same kinds of expenses and fees as you did with your present mortgage. These can include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and so on.
Do the Math
You might investigate paying points to receive a lower interest rate. When you pay (on average) three percent of the mortgage loan amount at the start, your savings for the life of the new mortgage can be substantial. You may be told that the points can be deducted on your income taxes, but as tax regulations can be difficult to keep up with, we urge you to speak with a tax professional before making decisions based on this.
Another thing about taxes is that once you bring down your interest rate, of course you will also be reducing the paid interest amount that you may deduct on your federal income taxes. This is another expense that some borrowers take into consideration. Call us at 2817780805 to help you do the math.
In the end, for most borrowers the total of initial costs to refinance are paid back soon in savings each month. We will help you find out what program is right for you, considering your cash on hand, the likelihood of selling your residence in the near future, and how refinancing could effect your taxes. Call us at 2817780805 to get you started.
Curious about refinancing? Call us at 2817780805.