When is Refinancing Worth it?
 |
 |
 |
Looking for mortgage advice? We'd be thrilled to talk about our many mortgage solutions! Give us a call today at 866-300-1550. Ready to begin? Apply Now.
|
|
|
|
|
Some have said that only if your new interest is at least 2 points under your current rate, should you refinance your loan. That might have been valid years ago, but with refinancing dropping in cost in recent years, it is never the wrong time to consider a new mortgage! A refinance is often worth its cost many times over, considering the advantages that come, in addition to a lower interest rate.
Advantages of Refinancing
You might be able to bring down your interest rate (sometimes by a lot) and reduce your monthly mortgage payment amount with a refinanced mortgage loan. You also may have the option of tapping into the equity in your property by "cashing out" some funds to renovate your home, consolidate debt, or plan a special vacation. You might be able to refinance into a shorter-term mortgage loan, enabling you to build your equity faster.
The Cost
Of course, you will have to pay for your the refinance process. When you refinance, you're paying for basically the same things you were charged for during your current mortgage. These probably include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and so on.
Do the Math
Paying points can help you attain a lower interest rate. The amount you'll save over the life of the mortgage might be substantial if you've paid up front about 3% of the new loan balance. Please consult a tax professional before acting on rumors that these points paid can be deducted on your taxes.
Another thing about taxes is that when you lower your interest rate, naturally you will also be reducing the interest amount that you can deduct on your federal income taxes. This is another expense that borrowers take into consideration. We can help you do the math! Call us at 866-300-1550.
Ultimately, for most borrowers the amount of up-front costs to refinance will be made up very quickly in savings each month. We'll work with you to determine which mortgage loan program is right for you, taking into account your cash on hand, the likelihood of selling your home in the next few years, and the effect refinancing could have on your taxes. Call us at 866-300-1550 to get started.
Want to know more about refinancing your home? Give us a call at 866-300-1550.