Is Refinancing Worth the Cost?

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Ever heard the old rule of thumb that states you should only consider refinancing if the new interest rate will be at least two points under your existing one? That might have been true a while back, but as refinancing has been costing less recently, it's never the wrong time to explore the options of a new loan! A refinanced mortgage may be worth its cost several times over, considering the benefits that may come, as well as a lower interest rate.


You might be able to lower your interest rate (sometimes substantially) and reduce your mortgage payment amount with your refinanced mortgage. You might also have the ability to "cash out" some of the built-up equity in your residence, that you may use to consolidate debts, add on to your home, or take a vacation. You could have the option to refinance into a shorter-term mortgage program, enabling you to build up your equity faster.

Fees and Expenses

All of these benefits do come with some expense, though. You'll pay the same sort of fees as with your current home loan. Included in your costs can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Doing the Math

Paying discount points can get you a lower interest rate. Your savings on the life of the loan could be substantial if you've paid up front about 3% of the new loan balance. We recommend that you consult a tax professional before acting on rumors that the points paid can be deducted on your federal income taxes.

Another thing about taxes is that if you lower your interest rate, it follows that you will also be reducing the paid interest amount that you may deduct on your taxes. This is one more cost that borrowers consider. Call us at 5626935048 to help you do the math.

Most borrowers find that the savings each month balance out the initial cost of a refinance. We'll help you determine which mortgage program is right for you, taking into account your cash on hand, the likelihood of selling your house in the near future, and the effect refinancing might have on your taxes. Call us at 5626935048 to get started.

Curious about refinancing? Give us a call at 5626935048.

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Nationwide Home Loans

NMLS #238531| CA BRE #01017101

16211 Whittier Blvd.
Whittier, CA 90603