Weighing the Options of Refinancing
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It has been said that only in the case your new interest is at least 2 points lower, should you refinance your mortgage. That could have been good advice years ago, but with the fact that refinancing has been costing less in recent years, it is never the wrong time to think about a new mortgage! Refinancing has a variety of benefits that can make it worth the initial expenditure a few times over.
Benefits from Refinancing
When you refinance, you might be able to lower the interest rate and mortgage payment , sometimes by a lot. Additionally, you could be given the option of pulling out some of your home equity by "cashing out" some funds to fix up your home, consolidate debt, or take your family on a vacation. You may be able to refinance into a shorter-term mortgage program, giving you the ability to build up your home equity faster.
Fees and Expenses
All these advantages do cost something, though. You will pay the same types of fees as with your current home loan. These can include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Doing the Math
You might look into paying points to be given a reduced interest rate. Your savings over the life of the mortgage could be significant if you've paid up front about 3% of the new loan balance. Please talk to a tax professional before acting on advice that any paid points may be deducted on your taxes.
One more cost that borrowers might take into account is that a lower rate of interest will reduce the interest amount you will deduct from your taxes. We can help you do the math! Call us at (800) 974-0509.
Most borrowers find that the savings each month balance out the initial cost of refinancing. We will work with you to find out which mortgage program is best for you, taking into account your cash on hand, how likely you are to sell your residence in the next few years, and the effect refinancing might have on your taxes. Call us at (800) 974-0509 to get you started.
Want to know more about refinancing your home? Call us at (800) 974-0509.