Weighing the Options of Refinancing

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Ever heard the pearl of wisdom that states you should only consider refinancing if your new interest rate is at least two points below your current rate? Perhaps that was good advice a number of years ago, but since refinance costs have been getting lower, it may be time to look into it. Refinancing your mortgage loan has a variety of benefits that often make it worth the up-front cost many times over.


You might be able to lower your interest rate (sometimes significantly) and reduce your monthly payment amount with a refinanced loan. You may also be able to "cash out" a portion of your home equity, which you will be able use to take care of higher interest debts, improve your home, or finance a vacation. You could be able to refinance into a shorter-term mortgage loan, giving you the ability to build your home equity quicker.

The Cost

Of course, you'll have to pay for your process of refinancing. You will have the same types of expenses and fees as you did with your existing mortgage. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Doing the Math

You might investigate paying points to reduce your interest rate. Your savings over the life of the loan may be substantial if you have paid up front about 3% of the new loan total. You might have heard that the points may be deducted on your income taxes, but as tax regulations can be difficult to keep up with, please consult with your tax professional before making any decisions based on this.

One more cost that a borrower may take into account is that a reduced rate of interest will reduce the interest amount you'll deduct on your federal income taxes. Call us at 7184417000 to help you do the math.

All things considered, for most borrowers the total of initial costs to refinance are made up very quickly in savings each month. We'll work with you to find out what program is perfect for you, considering your cash on hand, the likelihood of selling your residence in the near future, and how refinancing might effect your taxes. Call us at 7184417000 to get you started.

Curious about refinancing? Call us at 7184417000.

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Omni Mortgage Corp.

118-18 101st Avenue
Richmond Hill, NY 11419