Is Refinancing Worth the Cost?

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It has been said that only if your new interest will be at least two points lower, should you refinance your mortgage. Perhaps that was sound advice several years ago, but as refinance costs have been falling recently, it could be time to look into it. Refinancing your mortgage has some benefits that will often make it worth the up-front cost many times over.

Advantages

You could be able to bring down your interest rate (sometimes significantly) and have smaller mortgage payments with your refinanced mortgage. You also might be given the option of pulling out some of your home equity by "cashing out" a sum of money to remodel your home, consolidate debt, or plan a special vacation. You might be able to refinance to a shorter-term mortgage, enabling you to build up your home equity faster.

The Cost

Of course, you will have some fees and expenses during the process of refinancing. You will be charged the same sort of expenses and fees as you did with your present mortgage. These might include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.

Do the Math

You might investigate paying points to reduce your interest rate. The amount you will save on the life of the mortgage loan could be substantial if you've paid up front about three percent of the new loan total. You might have heard that the points can be deducted on your income taxes, but since tax regulations can be ever-changing, please consult with a tax professional before making any decisions based on this.

An additional expense that a borrower might take into account is that a lower rate of interest will reduce the interest amount you'll deduct from your taxes. We can help you do the math! Call us at 9722920448.

Most borrowers find that the savings each month outweigh the initial expenses of refinancing. We can help you explore your options, considering the effect a refinance might have on your taxes, if you are likely to sell your home in the near future, and your available cash. Call us at 9722920448 to get started.

Curious about refinancing your home? Give us a call: 9722920448.

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