Is Refinancing Worth the Cost?
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Have you ever heard the old rule of thumb that says you should only consider refinancing if the new interest rate is at least two points below your existing rate? That might have been good advice years ago, but since refinancing has been costing less over the last few years, it's a good time to think about a new mortgage! A refinance is often worth its cost many times over, because of the benefits that it brings, as well as a reduced interest rate.
When you refinance, you may be able to lower your interest rate and mortgage payment , sometimes by a lot. You also might be given the option of pulling out some of the equity in your house by "cashing out" some money to remodel your home, consolidate debt, or take your family on a vacation. With lower interest rates, you may also get the chance to build your home equity more quickly by switching to a shorter-term loan.
Expenses and Fees
As you probably know, you will have some fees and expenses during the process of refinancing. You will have to pay the same kinds of expenses and fees as with your existing mortgage loan. These could include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Do the Math
Paying discount points can help you attain a lower interest rate. Your savings on the life of the mortgage may be substantial if you've paid up front about 3% of the new loan balance. We recommend that you consult a tax professional before acting on hear-say that any points paid may be deducted on your federal income taxes.
Another thing about taxes is that once your interest rate is lowered, it follows that you'll also be lowering the interest amount that you'll be able to deduct on your taxes. This is another cost that some borrowers take into consideration. Call us at 7862626486 to help you do the math.
In the end, for most people the amount of initial costs to refinance are made up very quickly in savings each month. We'll help you determine what mortgage program is ideal for you, considering your cash on hand, how likely you are to sell your home in the next few years, and how refinancing may effect your taxes. Call us at 7862626486 to get started.
Curious about refinancing? Call us at 7862626486.