Weighing the Options of Refinancing
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It has been said that only if your new interest is at least 2 points below your current rate, should you refinance your mortgage. That may have been true a while back, but with refinancing dropping in cost recently, it is never the wrong time to explore the options of a new loan! A refinance is often worth its cost several times over, because of the advantages that it brings, in addition to a lower interest rate.
Benefits from Refinancing
When you refinance, you may have the ability to reduce your interest rate and mortgage payment , perhaps by a lot. Additionally, you might have the option of pulling out some of your home equity by "cashing out" a sum of money to remodel your home, consolidate debt, or take your family on a vacation. With lower interest rates, you might also get the chance to build your home equity more quickly by moving to a shorter term mortgage.
The Cost
As you probably know, you will have to pay for the process of refinancing. You'll pay the same kinds of expenses and fees as with your current mortgage. Among these may be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.
Doing the Math
Paying discount points can result in a lower interest rate. The money you will save over the life of the mortgage may be significant if you've paid up front about three percent of the new loan balance. You might have heard that points may be deducted on your income taxes, but as tax regulations are ever-changing, please consult with a tax professional before depending on this.
One more cost that a borrower might consider is that a lower interest rate will reduce the interest amount you will deduct from your taxes. Call us at 9497706067 to help you do the math.
Most people find that the savings each month outweigh the initial expenses of a refinance. We'll work with you to determine what program is perfect for you, looking at your cash on hand, the likelihood of selling your house in the near future, and the effect refinancing could have on your taxes. Call us at 9497706067 to get started.
Curious about refinancing? Call us at 9497706067.