Weighing the Options of Refinancing
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Ever hear the pearl of wisdom that says you should only refinance if your new interest rate is at least 2 points below your existing one? That might have been valid a while back, but since refinancing has been costing less recently, it is a good time to think about a new loan! Refinancing your loan has a variety of benefits that will often make it worth the initial expenditure a few times over.
When you refinance, you might be able to lower the interest rate and monthly payment , perhaps considerably. You may also have the option to "cash out" some of the built-up equity in your residence, which you may use to consolidate debt, improve your home, or plan a vacation. With reduced rates, you may also get the chance to build your home equity more quickly by switching to a shorter-term mortgage.
Of course, you will have some fees and expenses during the the refinance process. You will pay the same sort of expenses and fees as with your existing mortgage loan. These could include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and so on.
Do the Math
Paying discount points can result in a lower interest rate. If you pay (on average) three percent of the loan amount at the start, the savings for the term of the refinanced loan can be substantial. You might have heard that the points may be deducted on your income taxes, but because tax regulations can be ever-changing, please speak with a tax professional before considering this in your calculations.
Another expense that a borrower may consider is that a reduced 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 7862626486.
Most borrowers find that the monthly savings outweigh 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 near future, and your cash on hand. Call us at 7862626486 to get started.
Curious about refinancing your home? Call us at 7862626486.