Weighing the Options of Refinancing
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It has been said that only if your new interest will be at least two points under your current rate, should you refinance your mortgage. That may have been accurate years ago, but with refinancing dropping in cost in recent years, it's never the wrong time to consider a new loan! Refinancing has various benefits that often make it worth the initial cost many times over.
Benefits
You might be able to lower your interest rate (sometimes significantly) and have smaller mortgage payments with your refinanced mortgage. Additionally, you could be given the option of pulling out some of your home equity by "cashing out" a sum of money to fix up your home, consolidate debt, or take your family on a vacation. You might be able to refinance into a shorter-term mortgage program, enabling you to add to your equity quicker.
The Cost
As you probably expect, you'll have to pay for your the refinance process. You will be charged the same kinds of fees as you did with your current home loan. These could include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and so on.
Do the Math
You might look into paying points to receive a lower interest rate. The amount you'll save on the life of the mortgage may be substantial if you have paid up front about three percent of the new loan balance. Please consult a tax professional before acting on rumors that any points paid can be deducted on your taxes.
Speaking of taxes, once you reduce your interest rate, it follows that you will also be reducing the paid interest amount that you may deduct from your taxes. This is one more expense that borrowers take into account. Call us at 5626935048 to help you do the math.
In the end, for most the amount of initial costs to refinance are made up soon in savings each month. We can help you explore your options, considering the effect a refinance may have on your taxes, if you are likely to sell your home in the near future, and your available cash. Call us at 5626935048 to get you started.
Want to know more about refinancing? Give us a call at 5626935048.