Weighing the Options of Refinancing

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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 might have been accurate years ago, but with the fact that refinancing has been costing less over the last few years, it is a good time to think about a new mortgage loan! A refinance is often worth its cost many times over, factoring in the advantages that can come, as well as a reduced interest rate.

Benefits

You may be able to lower your interest rate (sometimes significantly) and reduce your mortgage payment amount with your refinanced mortgage. Additionally, you may be given the option of pulling out some of the equity in your house by "cashing out" some funds to fix up your home, consolidate debt, or plan a special vacation. You could have the option to refinance into a shorter-term mortgage program, giving you the ability to build up your home equity quicker.

Expenses and Fees

As you probably know, you'll have some fees and expenses during your the refinance process. You will pay the same types of expenses and fees as with your existing mortgage. Included in the list will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Do the Math

You might investigate paying points to receive a lower interest rate. If you pay (on average) three percent of the loan amount up front, the savings for the term of the refinanced loan can be substantial. You may have heard that points may be tax deductible, but as tax regulations are difficult to keep up with, please speak with your tax professional before considering this in your calculations.

Another thing about taxes is that when you bring down your interest rate, of course you will also be reducing the paid interest amount that you'll be able to deduct on your taxes. This is one more expense that borrowers take into consideration. Call us at 2147187183 to help you do the math.

Most people find that the savings per month quickly balance out the initial cost of a refinance. We can help you figure out your options, considering the effect a refinance may have on your taxes, if you are likely to sell your home in the near future, and your available cash. Call us at 2147187183 to get you started.

Want to know more about refinancing? Give us a call: 2147187183.