Weighing the Options of Refinancing

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It has been said that only in the case your new interest is at least two points under your current rate, should you refinance your loan. Maybe several years ago that was sage advice, but as refinance costs have been falling recently, it may be a good time to look into it. A refinance is often worth its cost many times over, factoring in the benefits that may come, along with a reduced interest rate.


When you refinance, you could have the ability to lower your interest rate and monthly payment amount, perhaps by a lot. Additionally, you could have the option of pulling out some of the equity in your home by "cashing out" some funds to remodel your home, consolidate debt, or take your family on a vacation. With reduced rates, you may also get the chance to build your home equity faster by changing to a shorter-term mortgage.

Fees and Expenses

As you probably know, you will have some fees and expenses during the process of refinancing. You'll pay the same sort of expenses and fees as you did with your existing mortgage loan. Among these might be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and so on.

Doing the Math

You might think about paying points to be given a lower interest rate. The money you'll save over the life of the mortgage loan might be substantial if you've paid up front about three percent of the new loan total. You might have heard that the points can be deducted on your income taxes, but as tax regulations can be difficult to keep up with, we urge you to consult a tax professional before making any decisions based on this.

An additional expense that borrowers might consider is that a lower rate of interest will reduce the interest amount you will be able to deduct on your federal income taxes. We can help you do the math! Call us at 2147187183.

Ultimately, for most borrowers the amount of initial costs to refinance are made up soon in monthly savings. We can help you explore what your options are, considering the effect a refinance may have on your taxes, whether you are likely to sell your home in the near future, and your available cash. Call us at 2147187183 to get started.

Want to know more about refinancing your home? Give us a call at 2147187183.