Is Refinancing Worth the Cost?
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It has been said that only when your new interest will be at least 2 points below your current rate, should you refinance your loan. Perhaps that was sound advice several years ago, but as refinance costs have been getting lower, it could be a good time to take a serious look. Refinancing has a variety of benefits that often make it worth the initial expenditure several times over.
When you refinance, you could have the ability to reduce the interest rate and monthly mortgage payment amount, sometimes significantly. You also might be given the option of tapping into the equity in your property by "cashing out" some funds to remodel your home, consolidate debt, or take your family on a vacation. You might have the option to refinance to a shorter-term mortgage, giving you the ability to build up your equity faster.
Expenses and Fees
As you probably know, you'll have some fees and expenses during your process of refinancing. You'll pay the same kinds of expenses and fees as you did with your present mortgage. Included in your costs can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
Paying discount points can help you get a better interest rate. Your savings over the life of the mortgage may be significant if you've paid up front about three percent of the new loan balance. We recommend that you talk to a tax professional before acting on rumors that the paid points may be deducted on your taxes.
One more expense that a borrower might take into account is that a reduced rate of interest will reduce the interest amount you'll deduct from your federal income taxes. We can help you do the math! Call us at 325-998-8740.
Most people find that the monthly savings outweigh the up-front expenses of refinancing. We'll help you figure out which mortgage program is best for you, taking into account your cash on hand, the likelihood of selling your house in the next few years, and how refinancing could effect your taxes. Call us at 325-998-8740 to get started.
Curious about refinancing your home? Call us at 325-998-8740.