Weighing the Options of Refinancing

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Some have said that only in the case your new interest is at least 2 points lower, should you refinance your loan. That could have been valid years ago, but with the fact that refinancing has been costing less in recent years, it is a good time to explore the options of a new loan! A refinance is often worth its cost many times over, factoring in the advantages that it brings, along with a lower interest rate.

Benefits

When you refinance, you might be able to reduce your interest rate and monthly mortgage payment amount, perhaps considerably. You could also have the option to "cash out" some of the built-up equity in your home, which you are able use to take care of higher interest debts, improve your home, or finance a vacation. You may be able to refinance into a shorter-term mortgage program, enabling you to add to your equity quicker.

Fees and Expenses

As you probably expect, you will have to pay for the the refinance process. When you refinance, you're paying for a lot of the same things you were charged for during your current mortgage. Included in your costs can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Doing the Math

You might investigate paying points to get a better interest rate. Your savings over the life of the mortgage loan may be substantial if you've paid up front about three percent of the new loan balance. You might hear 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 a tax professional before making any decisions based on this.

Another thing about taxes is that if you reduce your interest rate, it follows that you will also be reducing the interest amount that you can deduct from your federal income taxes. This is one more cost that borrowers take into consideration. We can help you do the math! Call us at 5623200510.

Most borrowers find that the savings each month quickly outweigh the up-front expenses of refinancing. We will help you determine what loan program is right for you, taking into account your cash on hand, how likely you are to sell your house in the near future, and how refinancing might effect your taxes. Call us at 5623200510 to get started.

Curious about refinancing your home? Call us: 5623200510.

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