Is Refinancing Worth the Cost?

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Have you ever heard the pearl of wisdom that says you should only consider refinancing if the new interest rate is at least two points below your present one? Perhaps several years ago that was sage advice, but since refinance costs have been getting lower, it may be a good time to take a serious look. A refinance may be worth its cost many times over, considering the advantages that it brings, along with a reduced interest rate.


When you refinance, you may have the ability to reduce your interest rate and monthly mortgage payment , perhaps significantly. You may also be able to "cash out" a portion of your equity, which you may use to consolidate debt, improve your home, or finance a vacation. With reduced interest rates, you may also be able to build up home equity faster by moving to a shorter-term loan.

The Cost

As you probably know, you will have to pay for the the refinance process. When you refinance, you're paying for most of the same things you were charged for during your original mortgage loan. Included in your costs will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Doing the Math

You might investigate paying points to be given a lower interest rate. If you pay (on average) 3% of the loan amount at the start, the savings for the life of the new mortgage can be substantial. You may be told that points may be tax deductible, but as tax regulations are difficult to keep up with, please speak with a tax professional before depending on this.

Another thing about taxes is that once you bring down your interest rate, naturally you will also be reducing the interest amount that you'll be able to deduct on your federal income taxes. This is one more expense that borrowers take into consideration. We can help you do the math! Call us at 9094671090.

Most borrowers find that the monthly savings outweigh the up-front cost of refinancing. We can help you find out what your options are, considering the effect a refinance might have on your taxes, how likely you might be to sell in the next couple of years, and your available cash. Call us at 9094671090 to get you started.

Want to know more about refinancing your home? Give us a call: 9094671090.

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Greystone Loans, Inc.

Opening Doors to the American Dream since 1992

14726 Ramona Ave
Chino, CA 91710-5332