Is Refinancing Worth the Cost?

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It has been said that only when your new interest is at least 2 points below your current rate, should you refinance your mortgage. Perhaps that was good advice several years ago, but since refinance costs have been getting lower, it may be a good time to look into it. A refinanced loan can be worth its cost several times over, considering the benefits that can come, along with a reduced interest rate.


You might be able to bring down your interest rate (sometimes significantly) and reduce your mortgage payment amount with a refinanced mortgage loan. You might also be able to "cash out" a portion of the built-up equity in your residence, that you can use to consolidate debts, make home improvements, or plan a vacation. You could have the option to refinance to a shorter-term mortgage program, giving you the ability to add to your home equity quicker.

Fees and Expenses

As you probably expect, you'll have to pay for your the refinance process. When you refinance, you're paying for basically the same things you were charged for during your existing mortgage loan. Among these might be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.

Do the Math

Paying discount points can help you get a better interest rate. When you pay (on average) three percent of the loan amount at the start, the savings for the term of the new loan can be substantial. Please talk to a tax professional before acting on hear-say that any points paid may be deducted on your federal income taxes.

One more expense that a borrower may take into account is that a lower rate of interest will lower the interest amount you'll be able to deduct on your taxes. Call us at (972) 292-0448 to help you do the math.

Most borrowers find that the savings per month outweigh the up-front expenses of a refinance. We can help you explore your options, considering the effect a refinance could have on your taxes, how likely you might be to sell in the near future, and your cash on hand. Call us at (972) 292-0448 to get started.

Curious about refinancing your home? Call us: (972) 292-0448.

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