Weighing the Options of Refinancing

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

Advantages

You may be able to lower your interest rate (sometimes substantially) and have smaller monthly payments with your refinanced mortgage loan. You might also be able to "cash out" a portion of the built-up equity in your residence, that you will be able use to consolidate debt, improve your home, or take a vacation. You might have the option to refinance to a shorter-term mortgage program, giving you the ability to add to your equity faster.

Expenses and Fees

All of these benefits do come with some expense, though. With your refinance, you're paying for many of the same things you were charged for when you obtained your current mortgage. These may include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and so on.

Doing the Math

Paying points can result in a lower interest rate. The amount you will save on the life of the loan might be significant if you have paid up front about 3% of the new loan total. You may be told that points can be deducted on your income taxes, but since tax regulations can be ever-changing, we urge you to consult a tax professional before depending on this.

An additional cost that borrowers might take into account is that a lower rate of interest will lower the interest amount you'll deduct from your taxes. Call us at 7184417000 to help you do the math.

In the end, for most people the amount of initial costs to refinance will be paid back soon in savings each month. We can help you figure out what your options are, considering the effect a refinance could have on your taxes, whether you are likely to sell your home in the near future, and your available cash. Call us at 7184417000 to get started.

Want to know more about refinancing your home? Give us a call: 7184417000.

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Omni Mortgage Corp.

118-18 101st Avenue
Richmond Hill, NY 11419