When is Refinancing Worth it?
Curious about refinancing your home? Give us a call: 623-340-0934.
It has been said that only when your new interest will be at least 2 points below your current rate, should you refinance your loan. That could have been accurate a while back, but with refinancing dropping in cost over the last few years, it is never the wrong time to think about a new mortgage loan! Refinancing has some benefits that can make it worth the up-front expenditure many times over.
You might be able to bring down your interest rate (sometimes significantly) and reduce your mortgage payment amount with a refinanced mortgage. You also might be given the option of pulling out some of the equity in your property by "cashing out" a sum of money to fix up your home, consolidate debt, or take your family on a vacation. With lower rates, you may also be able to build your home equity faster by moving to a shorter-term mortgage.
Of course, you'll have some fees and expenses during the the refinance process. With your refinance, you are paying for basically the same things you were charged for during your current mortgage loan. Among these might be settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.
You could have to pay a penalty for refinancing your current loan too soon. This depends on the terms of your current mortgage loan. However, this sort of penalty may apply just to the first few years of the loan. We will help you sort through the details: contact us at 623-340-0934.
Doing the Math
Paying points can help you get a lower interest rate. Your savings on the life of the loan could be substantial if you've paid up front about 3% of the new loan balance. You may have heard that the points may be deducted on your income taxes, but since tax regulations are ever-changing, please consult with a tax professional before making decisions based on this.
Another thing about taxes is that when you reduce your interest rate, of course you'll also be lowering the interest amount that you'll be able to deduct on your taxes. This is another cost that borrowers take into consideration. Call us at 623-340-0934 to help you do the math.
Most borrowers find that the monthly savings quickly balance out the initial expenses of a refinance. We will help you figure out which mortgage loan program is ideal for you, taking into account your cash on hand, how likely you are to sell your home in the next few years, and the effect refinancing might have on your taxes. Call us at 623-340-0934 to get started.
Looking for mortgage advice? We will be glad to assist you! Give us a call today at 623-340-0934. Ready to begin? Apply Online Now