When is Refinancing Worth it?
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Looking for a mortgage loan? We'd be thrilled to answer your questions about our many mortgage solutions! Call us at 754-202-4376. Want to get started? Apply Here.
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Some have said that only when your new interest is at least 2 points lower, should you refinance your loan. That may have been valid a while back, but with refinancing dropping in cost over the last few years, it is never the wrong time to consider a new mortgage loan! A refinanced mortgage loan may be worth its cost many times over, factoring in the benefits that it brings, in addition to a lower interest rate.
Advantages
You could be able to bring down your interest rate (sometimes by a lot) and reduce your monthly payment amount with a refinanced mortgage. You might also be able to "cash out" a portion of the built-up equity in your home, which you may use to take care of higher interest debt, improve your home, or plan a vacation. You may have the option to refinance to a shorter-term mortgage program, enabling you to build your home equity quicker.
Fees and Expenses
All of these benefits do cost something, though. You will pay the same sort of 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 think about paying points to reduce your interest rate. Your savings over the life of the mortgage may be significant if you have paid up front about three percent of the new loan balance. We recommend that you consult with a tax professional before acting on hear-say that the points paid may be deducted on your taxes.
Another thing about taxes is that when your interest rate is lowered, of course you will also be lowering the interest amount that you may deduct on your federal income taxes. This is one more cost that some borrowers consider. Call us at 754-202-4376 to help you do the math.
Most borrowers find that the savings per month quickly balance out the initial cost of refinancing. We can help you explore your options, considering the effect a refinance may have on your taxes, whether you are likely to sell your home in the next couple of years, and your money on hand. Call us at 754-202-4376 to get you started.
Curious about refinancing? Call us at 754-202-4376.