Weighing the Options of Refinancing

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It has been said that only when your new interest is at least two points under your current rate, should you refinance your loan. Perhaps several years ago that was wise advice, but since refinance costs have been falling recently, it may be time to look into it. A refinanced mortgage can be worth its cost many times over, because of the benefits that come, in addition to a reduced interest rate.


When you refinance, you may be able to lower the interest rate and monthly mortgage payment amount, perhaps considerably. You could also have the ability to "cash out" some of your home equity, which you may use to consolidate debt, add on to your home, or take a vacation. With lower rates, you might also be able to build up home equity faster by switching to a shorter-term mortgage.

Expenses and Fees

Of course, you'll have some fees and expenses during your the refinance process. When you refinance, you're paying for basically the same things you were charged for when you obtained your current mortgage loan. These probably include settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.

Do the Math

Paying points can result in a lower interest rate. If you pay (on average) three percent of the mortgage loan amount up front, your savings for the life of the new loan can be substantial. We recommend that you consult with a tax professional before acting on advice that the points paid can be deducted on your taxes.

Another expense that borrowers might consider is that a reduced interest rate will reduce the interest amount you will deduct from your federal income taxes. Call us at 5626935048 to help you do the math.

All things considered, for most the total of up-front costs to refinance will be made up very quickly in monthly savings. We can help you explore your options, considering the effect a refinance might have on your taxes, how likely you might be to sell in the next couple of years, and your available cash. Call us at 5626935048 to get you started.

Want to know more about refinancing your home? Call us: 5626935048.

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Nationwide Home Loans

NMLS #238531| CA BRE #01017101

16211 Whittier Blvd.
Whittier, CA 90603