Is Refinancing Worth the Cost?
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Shopping for a mortgage loan? We'll be glad to talk about our many mortgage solutions! Call us at 5626935048. Ready to get started? Apply Online Now.
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Some have said that only if your new interest will be at least 2 points lower, should you refinance your loan. Maybe that was sound advice several years ago, but since refinance costs have been falling recently, it could be a good time to take a serious look. Refinancing your loan has some benefits that can make it worth the initial expenditure many times over.
Advantages
You could be able to lower your interest rate (sometimes substantially) and have smaller monthly payments with your refinanced loan. You also could be given the option of pulling out some of your home equity by "cashing out" some funds to fix up your home, consolidate debt, or plan a special vacation. With lower interest rates, you might also get the chance to build up home equity more quickly by switching to a shorter-term mortgage loan.
Fees and Expenses
All these benefits do cost something, though. When you refinance, you're paying for basically the same things you paid for when you got your original mortgage loan. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Doing the Math
You might offer to pay discount points (prepaid interest) to attain a more favorable interest rate. When you pay (on average) 3% of the loan amount at the start, your savings for the life of the new mortgage loan can be substantial. Please talk to a tax professional before acting on advice that any paid points can be deducted on your federal income taxes.
Speaking of taxes, if you reduce your interest rate, naturally you'll also be reducing the interest amount that you'll be able to deduct on your taxes. This is another cost that borrowers take into account. We can help you do the math! Call us at 5626935048.
Most people find that the monthly savings balance out the initial expenses of refinancing. We can help you find out what your options are, considering the effect a refinance might have on your taxes, how likely you may be to sell in the near future, and your available cash. Call us at 5626935048 to get you started.
Curious about refinancing your home? Call us: 5626935048.