Is Refinancing Worth the Cost?
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Are you looking for a mortgage loan? We can assist you! Call us at 2813708282. Ready to begin? Apply Now.
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Some have said that only when your new interest is at least two points lower, should you refinance your loan. That may have been true a while back, but with refinancing dropping in cost in recent years, it is never the wrong time to explore the options of a new loan! Refinancing has a number of benefits that often make it worth the up-front expenditure many times over.
Advantages
When you refinance, you might have the ability to reduce the interest rate and monthly payment , perhaps considerably. You may also have the option to "cash out" a portion of the built-up equity in your home, which you can use to consolidate debts, improve your home, or finance a vacation. With lower rates, you might also get the chance to build up home equity more quickly by changing to a shorter term mortgage loan.
Expenses and Fees
All these advantages do come with some expense, though. With your refinance, you're paying for basically the same things you paid for at the time you obtained your original mortgage. These could include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.
Doing the Math
You might consider paying points to reduce your 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. You may be told that the points may be deducted on your income taxes, but as tax regulations are ever-changing, please consult a tax professional before depending on this.
An additional cost that a borrower might take into account is that a reduced interest rate will lower the interest amount you will be able to deduct on your federal income taxes. We can help you do the math! Call us at 2813708282.
In the end, for most the total of initial costs to refinance are made up soon in monthly savings. We'll work with you to determine what mortgage program is ideal for you, looking at your cash on hand, the likelihood of selling your house in the near future, and what effect refinancing may have on your taxes. Call us at 2813708282 to get started.
Want to know more about refinancing? Give us a call at 2813708282.