Is Refinancing Worth the Cost?
Curious about refinancing your home? Give us a call: 888-365-2023.
Ever hear the pearl of wisdom that says you should only refinance if your new interest rate is at least 2 points lower than your present one? That may have been accurate a while back, but since refinancing has been costing less over the last few years, it is a good time to consider a new mortgage loan! Refinancing your mortgage loan has various benefits that often make it worth the up-front cost a few times over.
You may be able to bring down your interest rate (sometimes significantly) and have smaller mortgage payments with a refinanced mortgage loan. You could also have the option to "cash out" some of the built-up equity in your residence, which you are able use to consolidate debts, make home improvements, or finance a vacation. With reduced rates, you may also get the chance to build up home equity more quickly by moving to a shorter-term mortgage loan.
Fees and Expenses
As you probably know, you'll have to pay for your process of refinancing. You will have the same types of fees as you did with your present mortgage. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
When you refinance your current mortgage too quickly, you may have a penalty . It all depends on your current mortgage loan agreement. These penalties might apply only to the first year or two of the loan. We'll help you with the details: contact us at 888-365-2023.
Doing the Math
Paying discount points can get you a better interest rate. If you pay (on average) three percent of the loan amount up front, your savings for the life of the refinanced mortgage can be significant. Please consult with a tax professional before acting on advice that the paid points can be deducted on your federal income taxes.
Another thing about taxes is that once you lower your interest rate, it follows that you'll also be lowering the paid interest amount that you'll be able to deduct from your federal income taxes. This is one more cost that some borrowers consider. We can help you do the math! Call us at 888-365-2023.
In the end, for most people the amount of initial costs to refinance are paid back soon in monthly savings. We'll work with you to determine which loan program is ideal for you, looking at your cash on hand, the likelihood of selling your residence in the next few years, and how refinancing might effect your taxes. Call us at 888-365-2023 to get started.
Shopping for a mortgage? We'd be thrilled to talk about our many mortgage solutions! Give us a call today at 888-365-2023. Ready to get started? Apply Now