Is Refinancing Worth the Cost?
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Are you looking for a new mortgage loan? We can assist you! Give us a call at 4058873713. Ready to begin? Apply Online Now.
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Ever hear the pearl of wisdom that states you should only consider refinancing if your new interest rate will be at least 2 points below your existing rate? That could have been accurate a while back, but with refinancing dropping in cost over the last few years, it's a good time to consider a new mortgage loan! Refinancing has some advantages that can make it worth the initial cost many times over.
Benefits from Refinancing
You could be able to bring down your interest rate (sometimes substantially) and reduce your monthly payment amount with a refinanced mortgage. You may also have the option to "cash out" a portion of your home equity, which you can use to take care of higher interest debt, make home improvements, or plan a vacation. You could have the option to refinance to a shorter-term mortgage program, enabling you to build up your equity quicker.
The Cost
All these advantages do cost something, though. With your refinance, you're paying for many of the same things you paid for during your existing mortgage loan. Included in the list will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
You could need to pay discount points (prepaid interest) to attain a more favorable interest rate. The amount you will save over the life of the mortgage could be significant if you have paid up front about three percent of the new loan total. Please consult with a tax professional before acting on hear-say that any points paid can be deducted on your federal income taxes.
An additional expense that a borrower might take into account is that a lower interest rate will lower the interest amount you'll deduct from your federal income taxes. Call us at 4058873713 to help you do the math.
Most borrowers find that the savings per month outweigh the initial expenses of refinancing. We will help you figure out what mortgage loan program is right for you, considering your cash on hand, the likelihood of selling your home in the next few years, and what effect refinancing might have on your taxes. Call us at 4058873713 to get started.
Curious about refinancing? Give us a call: 4058873713.