Is Refinancing Worth the Cost?
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Are you looking for a new mortgage loan? We'll be glad to answer your questions about your mortgage needs! Give us a call today at (972) 292-0448. Ready to begin? Apply Now.
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Some have said that only in the case your new interest will be at least 2 points under your current rate, should you refinance your mortgage. Maybe that was sound advice a number of years ago, but since refinance costs have been getting lower, it could be time to look into it. Refinancing has a number of benefits that will often make it worth the up-front cost many times over.
Advantages of Refinancing
When you refinance, you could be able to lower your interest rate and monthly payment , perhaps by a lot. You could also have the option to "cash out" a portion of your home equity, that you will be able use to consolidate debts, make home improvements, or finance a vacation. You could be able to refinance to a shorter-term mortgage loan, giving you the ability to build up your equity faster.
Expenses and Fees
All these advantages do cost something, though. You'll pay the same types of expenses and fees as with your present mortgage. Among these can be settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Doing the Math
You could need to pay discount points (prepaid interest) to get a more favorable rate of interest. When you pay (on average) three percent of the loan amount at the start, your savings for the life of the refinanced loan can be great. You may be told that points may be tax deductible, but because tax regulations can be difficult to keep up with, please speak with a tax professional before depending on this.
One more cost that a borrower may consider is that a lower rate of interest will lower the interest amount you'll be able to deduct from your taxes. Call us at (972) 292-0448 to help you do the math.
Ultimately, for most borrowers the amount of up-front costs to refinance are made up soon in savings each month. We can help you find out what your options are, considering the effect a refinance may have on your taxes, if you are likely to sell your home in the near future, and your money on hand. Call us at (972) 292-0448 to get started.
Want to know more about refinancing your home? Call us at (972) 292-0448.
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