Weighing the Options of Refinancing

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It has been said that only if your new interest will be at least 2 points lower, should you refinance your mortgage. That could have been accurate a while back, but with refinancing dropping in cost recently, it's never the wrong time to explore the options of a new mortgage loan! A refinance is often worth its cost several times over, because of the advantages that it brings, in addition to a reduced interest rate.

Benefits

You might be able to bring down your interest rate (sometimes substantially) and make smaller monthly payments with your refinanced mortgage. Additionally, you may have the option of tapping into your home equity by "cashing out" some money to renovate your home, consolidate debt, or plan a special vacation. With lower interest rates, you may also be able to build up home equity faster by changing to a shorter term mortgage loan.

Expenses and Fees

Of course, you'll have some fees and expenses during your the refinance process. When you refinance, you're paying for many of the same things you were charged for during your original mortgage loan. Among these will be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.

Do the Math

You could need to pay discount points (prepaid interest) to attain a better interest rate. If you pay (on average) three percent of the mortgage loan amount up front, the savings for the term of the refinanced mortgage can be substantial. You may have heard that the points can be deducted on your income taxes, but because tax regulations can be difficult to keep up with, we urge you to consult with your tax professional before depending on this.

Another thing about taxes is that when you bring down your interest rate, naturally you'll also be reducing the interest amount that you'll be able to deduct from your taxes. This is one more expense that borrowers take into consideration. We can help you do the math! Call us at 5626935048.

In the end, for most borrowers the amount of initial costs to refinance are made up soon in savings each month. We can help you figure out what your options are, considering the effect a refinance might have on your taxes, how likely you may be to sell in the next couple of years, and your money on hand. Call us at 5626935048 to get you started.

Curious about refinancing? Call us: 5626935048.

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Nationwide Home Loans

NMLS #238531| CA BRE #01017101

16211 Whittier Blvd.
Whittier, CA 90603