Is Refinancing Worth the Cost?
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Shopping for a mortgage loan? We'll be glad to answer your questions about our many mortgage solutions! Call us at 866-300-1550. 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 lower, should you refinance your loan. That may have been true years ago, but with refinancing dropping in cost recently, it is a good time to explore the options of a new mortgage! A refinanced loan is often worth its cost many times over, because of the benefits that come, as well as a lower interest rate.
Advantages of Refinancing
You could be able to lower your interest rate (sometimes by a lot) and make smaller monthly payments with a refinanced mortgage. You also may be given the option of pulling out some of your home equity by "cashing out" some money to remodel your home, consolidate debt, or plan a special vacation. With lower interest rates, you may also be able to build your home equity more quickly by changing to a shorter-term mortgage loan.
Expenses and Fees
All of these benefits do come with some expense, though. You'll pay the same types of fees as with your existing mortgage. Included in the list might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
Paying points can result in a better interest rate. If you pay (on average) three percent of the loan amount initially, the savings for the term of the new loan can be substantial. You may hear that the points can be deducted on your income taxes, but since tax regulations are ever-changing, we urge you to consult with a tax professional before depending on this.
Another thing about taxes is that once your interest rate is lowered, of course you will also be reducing the paid interest amount that you'll be able to deduct from your federal income taxes. This is another cost that some borrowers take into consideration. We can help you do the math! Call us at 866-300-1550.
Ultimately, for most the amount of up-front costs to refinance are made up very quickly in monthly savings. We will help you find out which program is best for you, looking at your cash on hand, how likely you are to sell your residence in the next few years, and how refinancing will effect your taxes. Call us at 866-300-1550 to get started.
Curious about refinancing your home? Call us at 866-300-1550.