Is Refinancing Worth the Cost?
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Ever heard the pearl of wisdom that says you should only consider refinancing if your new interest rate is at least two points under your present one? That might have been true a while back, but with refinancing dropping in cost over the last few years, it's never the wrong time to explore the options of a new mortgage! A refinance is often worth its cost many times over, considering the benefits that it brings, as well as a lower interest rate.
When you refinance, you could be able to lower the interest rate and monthly mortgage payment , perhaps considerably. Additionally, you could be given the option of tapping into your home equity by "cashing out" some funds to renovate your home, consolidate debt, or take your family on a vacation. You might be able to refinance to a shorter-term mortgage, giving you the ability to build up your home equity quicker.
Expenses and Fees
As you probably expect, you'll have to pay for your the refinance process. When you refinance, you are paying for basically the same things you were charged for when you obtained your current mortgage. These might include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Do the Math
Paying points can get you a lower interest rate. Your savings over the life of the mortgage loan might be significant if you've paid up front about 3% of the new loan total. Please consult with a tax professional before acting on hear-say that any points paid can be deducted on your federal income taxes.
Another cost that borrowers might consider is that a lower rate of interest will reduce the interest amount you'll be able to deduct on your federal income taxes. We can help you do the math! Call us at 5806959369.
All things considered, for most the amount of up-front costs to refinance will be made up soon in savings each month. We can help you figure out your options, considering the effect a refinance might have on your taxes, whether you are likely to sell your home in the near future, and your money on hand. Call us at 5806959369 to get started.
Curious about refinancing? Give us a call: 5806959369.