Is Refinancing Worth the Cost?
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In the market for a new mortgage loan? We can help! Give us a call today at 7184417000. Ready to begin? Apply Online Now.
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Some have said that only in the case your new interest is at least 2 points lower, should you refinance your loan. That could have been true a while back, but with refinancing dropping in cost over the last few years, it is a good time to consider a new loan! A refinance may be worth its cost many times over, factoring in the benefits that may come, along with a reduced interest rate.
Benefits from Refinancing
When you refinance, you could have the ability to reduce your interest rate and mortgage payment , sometimes considerably. Additionally, you could be given the option of pulling out some of the equity in your home by "cashing out" some money to renovate your home, consolidate debt, or take your family on a vacation. You may be able to refinance to a shorter-term mortgage, giving you the ability to add to your home equity faster.
The Cost
All these benefits do cost something, though. With your refinance, you are paying for basically the same things you were charged for during your current mortgage. Included in the list will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Doing the Math
Paying points can result in a better interest rate. Your savings over the life of the loan may be substantial if you've paid up front about 3% of the new loan balance. We recommend that you consult a tax professional before acting on rumors that the paid points can be deducted on your taxes.
Speaking of taxes, when you reduce your interest rate, of course you will also be reducing the interest amount that you'll be able to deduct on your federal income taxes. This is another cost that some borrowers consider. Call us at 7184417000 to help you do the math.
All things considered, for most borrowers the amount of up-front costs to refinance will be made up soon in monthly savings. 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 money on hand. Call us at 7184417000 to get started.
Curious about refinancing your home? Call us: 7184417000.