When is Refinancing Worth it?
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In the market for a new mortgage loan? We'll be glad to answer your questions about our many mortgage solutions! Call us at 9722920448. Ready to begin? Apply Online Now.
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Have you ever heard the old rule of thumb that says you should only consider refinancing if the new interest rate will be at least 2 points lower than your present rate? That might have been sound advice years ago, but with refinancing dropping in cost recently, it is never the wrong time to think about a new mortgage! A refinance is often worth its cost many times over, factoring in the advantages that it brings, in addition to a reduced interest rate.
Benefits
When you refinance, you might have the ability to lower your interest rate and mortgage payment amount, sometimes by a lot. You may also have the option to "cash out" some of your equity, that you are able use to take care of higher interest debt, add on to your home, or plan a vacation. With reduced interest rates, you might also get the chance to build your home equity faster by changing to a shorter term mortgage loan.
Expenses and Fees
Of course, you'll have to pay for the process of refinancing. You will have to pay the same sort of expenses and fees as you did with your current mortgage. Among these may be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.
Doing the Math
Paying points can help you get a better interest rate. The amount you will save over the life of the mortgage loan may be significant if you have paid up front about three percent of the new loan balance. We recommend that you talk to 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 once you bring down your interest rate, naturally you will also be lowering the paid interest amount that you may deduct from your federal income taxes. This is one more cost that some borrowers consider. We can help you do the math! Call us at 9722920448.
Most people find that the monthly savings balance out the up-front cost of a refinance. We will work with you to find out which loan program is the best fit for you, taking into account your cash on hand, the likelihood of selling your house in the next few years, and what effect refinancing might have on your taxes. Call us at 9722920448 to get you started.
Curious about refinancing your home? Call us at 9722920448.