Weighing the Options of Refinancing
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In the market for a new mortgage loan? We'd be thrilled to discuss your mortgage needs! Give us a call at 9094671090. Want to get started? Apply Now.
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Some have said that only when your new interest will be at least 2 points below your current rate, should you refinance your mortgage. Maybe that was good advice several years ago, but as refinance costs have been getting lower, it could be time to look into it. Refinancing your mortgage loan has a variety of advantages that can make it worth the up-front expenditure several times over.
Benefits
You could be able to lower your interest rate (sometimes significantly) and make smaller mortgage payments with your refinanced loan. You could also have the option to "cash out" a portion of the built-up equity in your home, which you may use to consolidate debts, improve your home, or plan a vacation. With reduced rates, you might also get the chance to build your home equity faster by switching to a shorter term mortgage loan.
The Cost
All these benefits do cost something, though. You will pay the same kinds of expenses and fees as with your present mortgage loan. These can include settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.
Doing the Math
You might think about paying points to reduce your interest rate. The amount you'll save on the life of the loan could be significant if you have paid up front about 3% of the new loan total. We recommend that you consult with a tax professional before acting on advice that any paid points can be deducted on your taxes.
One more expense that borrowers may take into account is that a reduced rate of interest will reduce the interest amount you will deduct from your taxes. Call us at 9094671090 to help you do the math.
Ultimately, for most people the amount of initial costs to refinance are made up very quickly in savings each month. We can help you figure out what your options are, considering the effect a refinance could have on your taxes, whether you are likely to sell your home in the near future, and your available cash. Call us at 9094671090 to get you started.
Curious about refinancing your home? Call us at 9094671090.