Is Refinancing Worth the Cost?

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Ever heard the old rule of thumb that states you should only refinance if your new interest rate will be at least two points below your present rate? Maybe several years ago that was wise advice, but as refinance costs have been falling recently, it could be time to take a serious look. Refinancing has various benefits that will often make it worth the up-front expenditure many times over.


When you refinance, you might have the ability to reduce the interest rate and monthly payment amount, perhaps by a lot. Additionally, you might be given the option of tapping into your home equity by "cashing out" some funds to remodel your home, consolidate debt, or plan a special vacation. You might have the option to refinance to a shorter-term mortgage loan, giving you the ability to build your equity quicker.

The Cost

As you probably know, you will have some fees and expenses during the process of refinancing. With your refinance, you're paying for many of the same things you were charged for when you obtained your original mortgage loan. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Do the Math

You might look into paying points to reduce your interest rate. The money you will save over the life of the loan might be substantial if you've paid up front about 3% of the new loan total. Please consult with a tax professional before acting on hear-say that the points paid can be deducted on your federal income taxes.

An additional cost that a borrower may take into account is that a lower interest rate will reduce the interest amount you will be able to deduct from your taxes. We can help you do the math! Call us at 9094671090.

Ultimately, for most borrowers the amount of initial costs to refinance will be paid back soon in monthly savings. We can help you explore what your options are, considering the effect a refinance may have on your taxes, how likely you may be to sell in the next couple of years, and your cash on hand. Call us at 9094671090 to get you started.

Want to know more about refinancing? Call us at 9094671090.

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Greystone Loans, Inc.

Opening Doors to the American Dream since 1992

14726 Ramona Ave
Chino, CA 91710-5332